TOKYO: Toshiba and Western Digital have resolved a dispute that was preventing the embattled Japanese electronics giant from selling its flash memory unit to raise cash to stay afloat.
The companies said Wednesday that the deal allows Western Digital to participate in future investments in their joint venture. That clears the way for a consortium led by Bain Capital to buy Toshiba Memory Corp.
The deal settles all disputes in litigation and arbitration over Western Digital’s objections to the planned sale of the companies’ NAND flash-memory SanDisk joint venture. It addresses concerns over protection of valuable patents and other intellectual property in the highly competitive field of flash memory products used in many high-tech products.
The two companies said they will jointly invest in a new computer chip fabrication unit at their joint venture in central Japan and in another facility in northeastern Japan’s Iwate prefecture.
The plan calls for Toshiba Memory Corp. to eventually sell shares through an initial public offering.
“The settlement represents the best possible outcome for all parties, clearing the way for the Bain Capital-led consortium to complete its acquisition of TMC as planned,” Yuji Sugimoto, managing director in Japan of Bain Capital, said in a statement.
Toshiba has said it hopes the sale, estimated at 2 trillion yen ($18 billion), will close by the end of March.
The company is inundated with losses related to its U.S. nuclear operations at Westinghouse Electric Co., which filed for bankruptcy earlier this year. Its decline, worsened earlier scandals over bookkeeping and corporate governance, is one of the most dramatic downfalls of a modern Japanese company.
Toshiba has said it expects to return to the black by the end of this fiscal year, in March.