The Daily Manila Shimbun


Toshiba in intensive talks with Western Digital

August 23, 2017

TOKYO- Toshiba Corp. has been in intensive talks with partner Western Digital Corp. on the planned sale of its memory chip operations, informed sources said Wednesday.

The struggling Japanese electronics and machinery maker aims to reach an agreement with the US memory chip joint venture partner by the end of this month, according to the sources.

Western Digital plans to team up with government-backed investment fund Innovation Network Corp. of Japan and others to purchase Toshiba Memory Corp., the Japanese company's prized flash memory chip unit.

If an agreement is reached, Western Digital is expected to withdraw a lawsuit it has filed in the United States to block the sale of Toshiba Memory. It is still uncertain whether an agreement can be reached, however.

In June, Toshiba gave a Japanese-US-South Korean consortium led by INCJ the preferential right to negotiate the acquisition of the flash memory unit. The consortium includes South Korean chipmaker SK Hynix.

Toshiba plans to sell the lucrative business because it needs to pull itself out of negative net worth by the end of March 2018, using proceeds from the sale, to keep its shares publicly traded.

But negotiations between Toshiba and the consortium have been stalled as INCJ grew concerned about the legal battle with Western Digital, which opposes the sale of the chip business to rival firms.

Toshiba President and Chief Executive Officer Satoshi Tsunakawa told a press conference on Aug. 10 that his company was in talks with Western Digital as well.

Western Digital has offered to buy Toshiba Memory for around 1.9 trillion yen in partnership with INCJ, the government-backed Development Bank of Japan and US investment firm Kohlberg Kravis Roberts & Co. Jiji Press