The Japanese industrial conglomerate Toshiba announced Wednesday that it has reached an agreement with its US partner Western Digital on the sale of its strategic memory card subsidiary Toshiba Memory, ending months of uncertainty and litigation.
Western Digital, the parent company of SanDisk, which has invested for years in Toshiba Memory alongside Toshiba, was fiercely opposed to the choice of the Japanese group to hand over control of this subsidiary to a consortium led by Bain Capital.
The sale, valued at around 2,000 billion yen (about 17.5 billion dollars) is however crucial for Toshiba to quickly recover its financial situation, severely deteriorated since the bankruptcy of its US nuclear subsidiary Westinghouse.
“We are very pleased to have reached this agreement, which clearly benefits all parties involved,” said Yasuo Naruke, executive vice president of the Japanese group and CEO of Toshiba Memory, in a statement.
“Toshiba remains on schedule” to finalize the sale of Toshiba Memory “by the end of March 2018,” he said.
Toshiba has always aimed to finalize the sale before the end of its fiscal year 2017/18, in order to avoid a cancellation of its action on the Tokyo Stock Exchange for insolvency.
To gain more leeway, while the sales process was still paralyzed by the opposition of Western Digital, the Japanese group had completed in early December, a capital increase of 600 billion yen (about 5.3 Billions dollars).
The agreement also provides for an extension of the partnership between Toshiba and Western Digital, with new joint investments next year in Toshiba Memory to produce the next generation of 3D flash memory cards, and mutual protection of their assets and confidential information, specifies the press release.