Toshiba and its joint venture partner, Western Digital, have investigated the Japanese electronic equipment giant's plan to sell a flash memory unit to raise money for survival.
The companies said Wednesday that the agreement allows Western Digital to participate in future investments in its joint venture, paving the way for a consortium led by Bain Capital to buy Toshiba Memory Inc.
The deal also addresses concerns about protecting valuable patents and other intellectual property in the high competitiveness of the flash memory products used in many high-tech products.
The two companies said they will settle all disputes in litigation and arbitration over Western Digital's objections to the planned sale of the Nand Flash Memory SanDisk joint venture.
"The settlement represents the best possible outcome for all parties, paving the way for the Capital-led Bain consortium to complete its acquisition of TMTK as scheduled," said Yuji Sugimoto, Executive Director of Japan at Bain Capital, in a statement.
The two companies said they will jointly invest in a new computer chip manufacturing unit in their joint venture in central Japan and at another facility in Iwate Prefecture, northeastern Japan.
The plan calls for Toshiba Memory Corp. to eventually sell the shares through an initial public offering.
“With the litigation and arbitration concerns removed, we look forward to renewing our cooperation with Western Digital, and accelerating the growth of TMC to meet the growing global demand for flash memory,” said Yasu Narok, Toshiba’s Senior Executive Vice President and Chairman and CEO of Toshiba. Toshiba.
He said the plan will ensure Toshiba memory has the resources it needs to compete in the flash memory market, which is growing rapidly with advances in artificial intelligence and networks for products that have Internet connections, widely known as the "Internet of Things".
Western Digital CEO Steve Milligan said the arrangement with Toshiba adequately protected its interests.
Toshiba said it hoped the sale of 2 trillion yen (18 billion dollars) would be concluded by the end of March. And you may have to remove other obstacles, such as potential anti-trust concerns.
Toshiba has been inundated with losses related to its US nuclear operations at Westinghouse Electric, which filed for bankruptcy earlier this year. Its decline has exacerbated the previous scandal over bookkeeping and corporate governance, one of the biggest downsides of a modern Japanese company. But the company said it expects to return to black by the end of this fiscal year in March.
Meanwhile, it has struggled to avoid being eliminated from the list. Last week it raised 600 billion yen ($ 5.3 billion) by issuing new shares with 60 foreign investment funds.
Bain Capital Private Equity, headquartered in Boston, is one of the world's leading investment companies. The industry-leading group includes the government-backed Japan Development Bank and Japan Innovation Network, which is made up of 26 big-name Japanese corporate investors, including Sony Corporation, Canon Corporation, Toyota Motor Corporation, Sumitomo Mitsui Banking Corp. The consortium also includes SKHynix in South Korea.
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