Joint venture partners Toshiba and Western Digital are reportedly close to settling a legal dispute that blocks the Japanese company's plans to sell its $18 billion chip unit. Fred Katayama reports.
It seems like the never-ending story, but media reports say Toshiba and Western Digital are finally close to settling a legal dispute. That has been a big obstacle for Toshiba in carrying out its plans to sell its $18 billion chip unit to a consortium that includes the U.S. private equity firm Bain Capital and South Korean memory chip supplier SK Hynix. Western Digital is Toshiba's joint venture partner in that chip business. It had earlier been jilted in an auction for that unit. Western Digital insists the Japanese electronics giant can't do a deal without its consent. The American data storage maker is seeking an injunction and a ruling from the International Court of Arbitration. BTIG analyst Edward Parker said, "All logic suggests it's in the best interests of everyone to find common ground. Both companies have been extraordinarily far apart." Bloomberg reports Toshiba and Western Digital are close to an agreement, saying Western Digital would abandon its bid to block the deal provided it can extend its joint venture agreement with Toshiba. The Japanese news agency Jiji says one sticking point remaining between Bain and Western Digital is the amount of influence SK Hynix will exert over the chip unit. Toshiba needs to sell the chip unit to cover liabilities at its bankrupt U.S. nuclear reactor company. Toshiba shares closed nearly 2 percent higher in Tokyo. Western Digital shares opened higher.