Western Digital CEO in Japan to finalize Toshiba chip deal

Postado Agosto 28, 2017

Some senior Toshiba executives had initially balked at Western Digital's offer, but sources said on Friday that the USA firm took a conciliatory tack and decided not to seek a management role in the new business and limit its stake to no more than one-third even when it converts the bonds to equity.

This will ensure that Japanese organisations maintain control of Toshiba Memory Corp with a stake of about 60 per cent, a move meant to allay Japanese government intervention in the sale.

Banking groups SMBC and Mizuho will also each extend about 700 billion yen in loans to get it over the line, while Toshiba will maintain a 100 billion yen stake in the business. Toshiba has said it could not comment on details of talks.

Toshiba is scrambling to sell its flash memory unit to cover losses from its bankrupt US nuclear business Westinghouse.

Word is, Toshiba's business executives are wary of a deal with the US-based firm, hence Western Digital's offer comes in light of this.

Toshiba wants to secure the deal by the end of the fiscal year in March 2018.

Their talks stalled after Western Digital - who is a partner in Toshiba's main chip plant - argued that they needed to consent to a sale.

Western Digital CEO Steve Milligan is visiting Japan for negotiations with Toshiba President Satoshi Tsunakawa over the planned sale of Toshiba Memory, The Nikkei learned Monday.

Toshiba's board plans to vote on Western Digital's offer on August 31 if the two sides can agree on a deal, the people said.

Toshiba picked a preferred consortium in June which included Japanese government-backed firms, private equity firm Bain Capital, and Toshiba's South Korean rival SY Hynix. Some sources say that whilst some see Western Digital as a serious contender, others are concerned that the deal will fizzle out due to funding, regulatory and cultural issues.