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Western Digital dispute with Toshiba heads for arbitration

Western Digital dispute with Toshiba heads for arbitration

Western Digital wants its consent to be taken in the sale of Toshiba’s memory business

Western Digital is seeking arbitration, demanding that its consent has to be taken before Toshiba can go ahead with plans to sell a stake in its memory business to raise funds.

The storage technology company acquired SanDisk last year and has been rumored to be a bidder for a stake in the Toshiba memory business, which has reportedly attracted a large number of other bidders including Apple and Foxconn Technology.

SanDisk has been a long-term partner of Toshiba, with the two companies collaborating in the fabrication of nonvolatile memories, but is not seen as a front-runner in the auction.

On Sunday, Western Digital said that several of its SanDisk subsidiaries have filed for arbitration with the ICC International Court of Arbitration in connection with three NAND flash-memory joint ventures it operates with Toshiba.

“Toshiba’s attempt to spin out its joint venture interests into an affiliate and then sell that affiliate is explicitly prohibited without SanDisk’s consent,” said Western Digital’s CEO Steve Milligan in a statement, citing joint venture agreements SanDisk has with Toshiba.

The arbitration, which could be held in San Francisco in accordance with the agreements, will likely delay Toshiba’s plans to sell a majority part of its stake in its memory business.

“There is no fact constituting a breach of JV agreements and we believe WD has no ground to interfere with the process,” wrote a Toshiba spokesperson in an email, adding that the company has not received any notification of any arbitration process and cannot comment on it.

Toshiba is considering selling a stake in its memory unit to to raise funds for an impairment loss in its bankrupt U.S. nuclear plant unit.

It said earlier this year its was considering separating its memory business, including SSD but excluding image sensors, into a separate company called Toshiba Memory.

Western Digital is now asking the arbitration court for an order requiring Toshiba to roll back a transfer in April of its interests in the joint ventures to Toshiba Memory as it holds that the transfer requires the consent of SanDisk in line with existing agreements.

Western Digital also wants an injunction preventing Toshiba from further breaching its agreements with the SanDisk joint ventures by transferring its interests in the joint venture, or any interest in an affiliate that holds its flash joint venture interests, without SanDisk’s consent.


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