September 27, 2017
A new article by Reuters reveals that Western Digital is now seeking an injunction in a bid to halt Toshiba’s chip business sale to a rival.
Western Digital, a US firm “which jointly invests in Toshiba’s main chip plant”, made the announcement of its pending injunction yesterday. This legal action is the latest chapter in the long tale of Toshiba’s decision to sell the chip business, which the Japanese conglomerate first mentioned at the start of this year.
Now, in the wake of last week’s decision to sell the business to the Bain group and South Korea’s SK Hynix for $18 billion (€15.1 billion), Western Digital is seeking an injunction with the International Court of Arbitration where it “initiated proceedings against its partner earlier this year.”
Western Digital argues that, as chip venture partner, Toshiba cannot make the sale without its consent.
According to Reuters, “A panel of three arbitrators may be formed as early as this week and a decision on the injunction could come late this year before any deal closes”, a source has revealed. However a final ruling “is not expected before 2019.”
Toshiba’s deal with the Bain group and SK Hynix currently remains unsigned, with Toshiba citing consortium member, Apple Inc., as the cause, with Apple “yet to agree to key terms.”
For Toshiba this deal is crucial, as the conglomerate urgently needs funds to compensate for the failure of its now-bankrupt US nuclear facility, but time is running out and the threat of delisting is looming.
Western Digital released a statement saying that “Toshiba’s decision had been disappointing, given that it had made major concessions” and that it was “vehemently opposed to a Bain deal” as the inclusion of the South Korean rival chipmaker “heightens the risk of technology leaks and introduces the risk that the deal may not clear regulatory reviews”. As yet, Toshiba has not commented in response.
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