Kioxia gets new top shareholder as SK hynix gains effective voting control

The largest shareholder of Kioxia, the Japanese memory chip maker, has changed from Toshiba to investment firm BCPE Pangea Cayman 2. Bloomberg reported that SK hynix holds bonds convertible into nearly all of BCPE Pangea Cayman 2's voting rights, in effect giving the South Korean chipmaker the largest voting stake in Kioxia.

According to a Kioxia disclosure Tuesday, Toshiba's stake fell from 14.48% to 14.12% as of July 31, causing it to lose its top-shareholder position to BCPE Pangea Cayman 2. Kioxia said the change took effect Monday.

Bloomberg, citing Kioxia's business report, said SK hynix holds bonds convertible into virtually all of BCPE Pangea Cayman 2's voting rights. While the investment firm is nominally the top shareholder, analysts say SK hynix's influence has expanded significantly in terms of actual voting power.

SK hynix joined a consortium led by US private equity fund Bain Capital in 2018 to jointly acquire what was then Toshiba Memory, now Kioxia. However, out of consideration for concerns from the Japanese government and other stakeholders, the company is understood to have agreed to keep its voting stake at or below 15% through 2028 unless Kioxia permits otherwise.

Kioxia competes in the NAND flash market against Samsung Electronics, SK hynix and Western Digital, among others. While the change in top shareholder does not directly alter management control, observers say SK hynix's strategic influence over the company could grow considerably.