SAN FRANCISCO — Toshiba Corp. has agreed to provide Western Digital Corp. (WD), its partner in NAND flash technology development and manufacturing, at least two weeks notice prior to selling assets that are part of a joint development between the two companies.
Toshiba agreed to provide the notice following an order issued by a California court here after the two companies attended a hearing earlier this month, WD said in a press statement.
WD said the agreement between the two companies, which was officially entered by the court as an order, protects the joint venture interests of its SanDisk subsidiary and preserves SanDisk's consent rights until an arbitration between the two companies that will be heard in the International Chamber of Commerce. WD request the arbitration hearing May and it is expected to begin within the next month.
Toshiba has been moving to sell its semiconductor division to help offset huge losses by the conglomerate's U.S. nuclear power subsidiary.
After weeks of bigs and negotiations, Toshiba named a consortium led by the Innovation Corporation of Japan (INCJ) as its preferred bidder last month — much to the dismay of WD, which also seeks to acquire the Toshiba chip division. WD has objected that Toshiba is contractually obligated to seek its approval prior to selling assets that are part of the joint venture between the two companies and had been pushing Toshiba for exclusive negotiating rights.
However, a deal with the INCJ-led coalition — which also includes the Development Bank of Japan, private equity firm Bain Capital and South Korean memory chip vendor Hynix — has not materialized. The Reuters news service reported that Toshiba's board met last week to consider other bids.
"Our goal has always been to protect and preserve the health and future of our successful joint ventures," WD said in the statement. "Our ongoing discussions with Toshiba and its stakeholders have been constructive, and we will continue to work to seek a solution that is in the best interests of all parties."
Reuters reported that a Toshiba spokesman said that, as a practical matter, Toshiba does not expects to close a deal within two weeks and that the company looks forward to presenting its case at the ICC arbitration tribunal.
—Dylan McGrath is the editor-in-chief of EE Times.
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