TOKYO – Japanese conglomerate Toshiba and US-based company Western Digital announced on Wednesday that they have reached an agreement to end their dispute over the sale of the Japanese chips subsidiary they jointly manage.
As part of the agreement, both companies concur “to withdraw all pending litigation and arbitration actions” as part of the settlement, which removes a major obstacle to completing the sale of Toshiba’s memory chip business, valued at about 2 trillion yen ($17.6 billion).
Western Digital, which jointly manages the chip-producing facility with Toshiba in Yokkaichi city, opposed Toshiba’s attempt to sell its chip unit to third parties, claiming that sharing facilities with another company could affect its performance and lead to losses.
Both companies also decided to extend their business cooperation until 2029, as well as to promote new agreements on their joint venture in the new fabrication facilities which are under construction in Yokkaichi and another new plant, which will be build in Iwate, northern Japan.
With all pending litigation and arbitration withdrawn, Toshiba Memory (TMC) plans to complete the sale of its memory chip business to a consortium led by US investment firm Bain Capital by March 2018, TMC vice president Yasuo Naruke said.
“The settlement represents the best possible outcome for all parties, clearing the way for the Bain Capital-led consortium to complete its acquisition of TMC as planned,” said Bain Capital’s Head of Japan, Managing Director Yuji Sugimoto.
Toshiba agreed in September to sell its NAND flash memory chips manufacturing subsidiary to the consortium, which also includes Apple, Dell and South Korea’s SK Hynix, to raise funds after the bankruptcy of its US nuclear subsidiary, Westinghouse Electric.
With the sale of its chip unit, the Japanese tech conglomerate could avoid being delisted from the Tokyo Stock Exchange, where it has been trading in the Second Sections since August.
NAND memory chips, used in smartphones, computer servers and other electronic devices to store data, are in high demand.
Toshiba is the second largest manufacturer of this product in terms of revenue, behind Samsung Electronics.