Western Digital chief sets off to seal Toshiba chip deal
- 28 August, 2017 16:52
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)