Published Date : Dec 12, 2017
Western Digital Corp and Toshiba Corp have agreed in principle to straighten out their legal dispute over the issue of sale of Toshiba Corp’s business of flash memory worth US$18 billion. Sources close to the matter said that there will be a formal announcement within next 24 hours.
The U.S. based company will drop the claims of arbitration in the U.S. that were focused at stopping Toshiba from doing the chip business to a conglomerate led by the Bain Capital, while the Japan based company will stop its legal allegations against Western Digital. The sources closed to the matter refused to identify themselves as the matter between the companies is private. As a part of agreement, Western Digital will be allowed to invest along with Toshiba in a high tech chip plant in Japan and get a guaranteed supply for the next gen memory chips.
The company partners have been engaged in a legal dispute since early this year after the Japan based company announced that it would sell off the chip business to reimburse for the huge losses in its nuclear business in the U.S. On the other hand, Western Digital made an argument that Toshiba required its permission to sell off the business, an argument which was contested by the Japanese company. Toshiba needs to increase its capital to avoid falling down of its shares or delisting from the Tokyo Stock Exchange.
Since the news of resolution broke out, the shares of Toshiba have gone up by 10 percent and rose by almost 1.3 percent on Tuesday in trading in Tokyo