Loading
Search
▼ Toshiba, Western Digital Reach Broad Agreement On Chip Unit Sale
- Category:Other
TOKYO - Toshiba Corp and Western Digital Corp reached a broad accord on the sale of the Japanese conglomerate's chip unit as the U.S. company has agreed to drop its legal actions, sources close to the matter said Monday.
Western Digital CEO Steve Milligan is currently visiting Japan as the two companies have made progress on major issues at the working level.
Milligan has met with officials of the Ministry of Economy, Trade and Industry, the sources said. The CEO is expected to continue to make final arrangements with Toshiba President Satoshi Tsunakawa.
Tsunakawa is likely to make a final decision on the deal at a board meeting Thursday and make an announcement the same day. Toshiba had told Western Digital a deal would be reached on condition the U.S. company drops its legal actions.
Western Digital, which has jointly invested in Toshiba's Yokkaichi flash memory plant in central Japan, has taken the Japanese conglomerate to court to block the sale of Toshiba Memory Corp, claiming a sale without its consent would breach their joint venture contract.
The Western Digital-led consortium has so far raised 1.9 trillion yen ($17 billion) of Toshiba's 2 trillion yen asking price for Toshiba Memory. The California-based company has proposed paying 150 billion yen of that amount by purchasing bonds convertible into common shares, forgoing voting rights for the time being.
Monday's negotiations were also expected to be focused on the size of the voting rights in Toshiba Memory that Western Digital will be entitled to in the future. It may alternatively accept preferred shares.
Toshiba hopes to keep Western Digital's voting privilege under 20 percent in consideration of antitrust regulations in the various countries it does business in.
Toshiba Memory will remain under Japanese control, with more than 60 percent of voting rights at the company to be held by Japanese parties, sources have said.
The price tag will also be covered by investments of 300 billion yen each from the government-backed Innovation Network Corp of Japan, the Development Bank of Japan and U.S. fund Kohlberg Kravis Roberts &
Co. Toshiba is seeking to retain some shares in the unit.
Toshiba and the Western Digital consortium also agreed to take the unit public several years down the line.
Toshiba is racing to finalize the sale to raise money that would cover huge losses from its now-bankrupt U.S. nuclear power unit, Westinghouse Electric Co. The losses have plunged the Japanese conglomerate into negative net worth, a situation it must remedy by next March to avoid a delisting from the Tokyo stock market.
The legal dispute with Western Digital derailed Toshiba's negotiations with a separate consortium including South Korean chipmaker SK Hynix Co and U.S. investment fund Bain Capital.
© KYODO
Western Digital CEO Steve Milligan is currently visiting Japan as the two companies have made progress on major issues at the working level.
Milligan has met with officials of the Ministry of Economy, Trade and Industry, the sources said. The CEO is expected to continue to make final arrangements with Toshiba President Satoshi Tsunakawa.
Tsunakawa is likely to make a final decision on the deal at a board meeting Thursday and make an announcement the same day. Toshiba had told Western Digital a deal would be reached on condition the U.S. company drops its legal actions.
Western Digital, which has jointly invested in Toshiba's Yokkaichi flash memory plant in central Japan, has taken the Japanese conglomerate to court to block the sale of Toshiba Memory Corp, claiming a sale without its consent would breach their joint venture contract.
The Western Digital-led consortium has so far raised 1.9 trillion yen ($17 billion) of Toshiba's 2 trillion yen asking price for Toshiba Memory. The California-based company has proposed paying 150 billion yen of that amount by purchasing bonds convertible into common shares, forgoing voting rights for the time being.
Monday's negotiations were also expected to be focused on the size of the voting rights in Toshiba Memory that Western Digital will be entitled to in the future. It may alternatively accept preferred shares.
Toshiba hopes to keep Western Digital's voting privilege under 20 percent in consideration of antitrust regulations in the various countries it does business in.
Toshiba Memory will remain under Japanese control, with more than 60 percent of voting rights at the company to be held by Japanese parties, sources have said.
The price tag will also be covered by investments of 300 billion yen each from the government-backed Innovation Network Corp of Japan, the Development Bank of Japan and U.S. fund Kohlberg Kravis Roberts &
Co. Toshiba is seeking to retain some shares in the unit.
Toshiba and the Western Digital consortium also agreed to take the unit public several years down the line.
Toshiba is racing to finalize the sale to raise money that would cover huge losses from its now-bankrupt U.S. nuclear power unit, Westinghouse Electric Co. The losses have plunged the Japanese conglomerate into negative net worth, a situation it must remedy by next March to avoid a delisting from the Tokyo stock market.
The legal dispute with Western Digital derailed Toshiba's negotiations with a separate consortium including South Korean chipmaker SK Hynix Co and U.S. investment fund Bain Capital.
© KYODO
- August 30, 2017
- Comment (0)
- Trackback(0)