Proactive Investors - Run By Investors For Investors

Toshiba suing Western Digital over sale of memory chip business

Western Digital is opposed to Toshiba's plans to sell its memory chip business to a consortium
Toshiba and Western Digital are locked in a legal dispute

Toshiba is suing Western Digital Corp (NASDAQ:WDC) 120bn yen for allegedly interfering in the sale of its memory chip business.

The final stages in the sale of the chip unit were disrupted after Western Digital and US private equity group KKR resubmitted their bid for the business.

Toshiba accused Western Digital of “continually interfering with the bid process”. The Japanese tech giant also claimed that Western Digital will face antitrust issues if it buys the business since it already owns Sandisk.

The company had been closing in on a final deal to deal the division to its preferred bidder, a consortium of Japanese government-backed fund and Bain Capital.

Toshiba had told shareholders it expected to have a deal in place by today. But the group said it failed to complete the agreement, said to be worth US$18bn, after Western Digital got involved.

Western Digital, which jointly runs Toshiba's main semiconductor plant, is opposed to the deal with the consortium  and has been at loggerheads with its Japanese partner. The US firm has sought a US court injection to prevent any deal that does not have its consent.

As part of Western Digital’s offer, it will provide debt financing to facilitate the sale of Toshiba’s 50.1% interest in the memory chip joint venture.

Toshiba is selling the unit to cover huge losses in its US nuclear division.  Last week the firm said 2016 losses may be greater than it had previously forecast on the back of financial struggles at the nuclear business.

It expects a net loss of 995bn yen for the year to March, compared to its earlier estimate of 950bn yen.

View full WDC profile View Profile

Western Digital Timeline

Copyright ©, 2019. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use