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Western Digital chief sets off to seal Toshiba chip deal

Western Digital chief sets off to seal Toshiba chip deal

Sources indicate that Western Digital’s chief executive is in Tokyo to finalise an agreement to buy Toshiba’s memory chip business

Western Digital’s chief executive is in Tokyo to finalise an agreement to buy Toshiba’s memory chip business, ending months of dispute over the auction, a person familiar with the matter has told Reuters.

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

A group including Western Digital, U.S. private equity firm KKR & Co and Japanese government investors are offering around 1.9 trillion yen (US$17.3 billion) for the unit, separate sources previously told Reuters.

The US firm is offering 150 billion yen through convertible bonds, the sources said.

The group and Toshiba aim to announce a deal by 31 August, when Toshiba's board meets, other people said on 28 August.

Both Western Digital and Toshiba declined to comment. A KKR representative could not be immediately reached.

Some senior Toshiba executives had initially balked at Western Digital's offer, but sources said on 25 August that the US 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.

Toshiba and Western Digital are the world's second and third largest producer of NAND chips.

(Reporting by Makiko Yamazaki; Editing by Himani Sarkar)


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