Toshiba, Western Digital, Said to be Close to Deal Approving Memory Business

In what should be good news for Toshiba Corporation of Japan, Reuters reports that Toshiba’s partner in its memory-chip business, Western Digital, will agree to the sale of the memory business, Toshiba Memory Corporation.

Toshiba has been seeking to sell its Toshiba Memory Corporation to a consortium led by private-equity firm Bain Capital in order to cover losses incurred by its now-bankrupt U.S. nuclear-power business Westinghouse.

According to  Reuters, Toshiba and Western Digital “have agreed in principle to settle a dispute over the Japanese firm’s plans to sell its $18 billion chip unit and aim to have a final agreement in place next week, sources familiar with the matter said.”

Western Digital has been seeking to block the sale for some months now. Under the proposed settlement, Western Digital would  drop arbitration claims seeking to stop the sale in exchange for Toshiba to allow it to invest in a new production line for advanced flash-memory chips that’s scheduled to begin next year, according to two un-named sources.

According to Reuters, a Toshiba spokesman said that while the company was open to a settlement, it would not disclose discussion specifics or details of board of directors meetings. “It is not a fact that we have reached an agreement with Western Digital,” he said.  Western Digital declined to comment.

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