Japan: Toshiba to discuss memory chip divestment wit hWestern Digital

The chiefs of Toshiba and its estranged US memory partner, Western Digital, will meet face to face as soon as this month, seeking to break a deadlock over the Japanese conglomerate’s urgent effort to find a buyer for its chip memory unit.

Western Digital CEO Stephen Milligan plans to head to Japan for talks with Toshiba counterpart Satoshi Tsunakawa and figures including officials from the Ministry of Economy, Trade and Industry. Other executives from Western Digital have already arrived and are reopening negotiations.

Tsunakawa is expected to ask the American company to drop its lawsuit opposing the sale of the memory unit to any third party without its consent. Milligan, for his part, probably will seek to make Western Digital part of the consortium to which the unit is ultimately sold.

The American hard-drive manufacturer would contribute hundreds of billions of yen in funding without initially receiving voting rights.

The Western Digital camp is expected to complete due diligence on the memory unit as early as next week. Toshiba aims to sign a final deal after getting the board’s blessing at a meeting this month.

But talks could hit an impasse if the two sides cannot agree on terms. If negotiations fall through, Toshiba will consider other options to get back on its feet, such as a capital increase.

Full Content: The Street

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