December 14, 2017
The OEM’s flash memory sale seems set to go ahead after a settlement with its venture partner was reached.
Toshiba and Western Digital, its joint venture partner, have “made peace” over the Japanese OEM’s plans to sell off its flash memory unit in order to stay afloat, reports The News Tribune.
The beleaguered OEM had decided to sell Toshiba Memory Corp. to a Bain Capital-led consortium, with the intention of raising funds after a financially uncertain year – a move which caused consternation with venture partner Western Digital.
However, Market Realist revealed at the start of December that a rapprochement between the pair was close; now it has been announced that the two companies have settled all disputes in litigation and arbitration, addressing concerns over valuable patent protection and similar IP issues in what is a highly competitive field of flash memory products.
Yasuo Naruke, a senior executive vice president at Toshiba, and CEO of Toshiba Memory, said: “With the concerns about litigation and arbitration removed, we look forward to renewing our collaboration with Western Digital, and accelerating TMC’s growth to meet growing global demand for flash memory.” Western Digital CEO Steve Milligan, meanwhile, said that the arrangement adequately protects its own interests.
The two companies have said they will now jointly invest in a new computer chip fabrication unit at their joint venture central Japan, and in another facility in Iwate prefecture.
In a statement, Bain Capital’s managing director in Japan, Yuji Sugimoto, declared that “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.”
Toshiba took the decision to sell off TMC – which it hopes will close by the end of March 2018, and raise ¥2 trillion ($17.7 billion/€14.9 billion) – following a series of losses related to its US nuclear operations; Westinghouse Electric Co. filed for bankruptcy earlier this year. This followed previous scandals over the OEM’s bookkeeping and corporate governance, and has meant that Toshiba has been fighting to avoid delisting.
However, hopes are high that the corporation will recover, with aims to be ‘back in the black’ by the end of the fiscal year. The sale of TMC – pending anti-trust concerns – will play a large part in that, now that Western Digital is pacified.
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