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Toshiba willing to let Western Digital in on memory sale

Japanese conglomerate set on sealing the deal in days, CEO says

| South Korea

TOKYO -- Toshiba seeks to ink the sale of its flash memory business to a three-country consortium next Wednesday but is open to talking out its differences with frenemy Western Digital if the American company seeks to join, CEO Satoshi Tsunakawa indicated Friday.

"My responsibility is to take one step after another so the sale will be completed by the end of March 2018," Tsunakawa told reporters, underscoring his resolve. Toshiba wants to quickly unload the operations to the consortium that includes the public-private Innovation Network Corp. of Japan, U.S. firm Bain Capital and South Korean chip company SK Hynix.

Western Digital, which operates memory joint ventures with the Japanese conglomerate, has vigorously fought any sale to a third party without its consent. The U.S. hard-drive manufacturer filed with the International Chamber of Commerce's International Court of Arbitration in May to block any such sale and more recently sought a U.S. court injunction to halt the process until the arbitration plays out. The rift between the partners had widened.

Western Digital "was a good partner, so the dispute is unfortunate," Tsunakawa said, revealing that differences over the valuation of the business lie at the core of the conflict.

Tsunakawa said he opposes letting Western Digital take control of Toshiba Memory, albeit while leaving the door open for the American company to get in on the deal. "We will not urge them to join the consortium, but we are open to talking if they approach us," he said. Tsunakawa made clear that even without resolving the dispute, Toshiba would go ahead with the talks with the consortium.

Separately, the CEO offered assurances that technology leaks to SK Hynix will not be a concern because the South Korean company will not be involved in running Toshiba Memory. He sought to dispel fears that SK Hynix's participation would drag out antitrust reviews by underscoring that no voting rights are to be granted to the company.

Toshiba has rejected a higher bid from U.S. chip company Broadcom. Tsunakawa explained this in terms of overall considerations involving not only business valuation, but also retention of personnel and plant facilities, as well as ensuring business continuity.

Asked about the government-linked INCJ taking control of the business, Tsunakawa said Toshiba Memory will actually be run by its own top executives.

(Nikkei)

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