Toshiba and Western Digital have announced an agreement that will bring an end to the two companies' dispute over the sale of Toshiba Memory Corporation to a consortium led by private equity firm Bain Company.
The agreement will bring an end to the various forms of litigation and arbitration processes started after Western Digital was out-bid for the memory chip and NAND flash subsidiary of Toshiba. Despite the sale, Toshiba remains a major minority shareholder in the company.
The settlement between the two companies will see both participate in future rounds of investment in jointly owned fabrication facilities in Japan.
"TMC [Toshiba Memory Corporation] and Western Digital will participate jointly in future rounds of investment in Fab 6, the state-of-the-art memory fabrication facility now under construction at Yokkaichi, including the upcoming investment round announced by Toshiba in October 2017," claimed the joint statement.
It continued: "Fab 6 will be entirely devoted to the mass production of BiCS Flash, the next-generation of 3D flash memory, starting next year. TMC and Western Digital similarly intend to enter into definitive agreements in due course under which Western Digital will participate in the new flash wafer fabrication facility which will be constructed in Iwate, Japan."
In addition, the two companies agreed to extend their flash memory collaboration agreements - Flash Alliance until the end of December 2029 and Flash Forward until the end of December 2027. A third agreement, called Flash Partners, had already been extended until the end of December 2029.
The settlement includes an acceptance by Western Digital of the sale of Toshiba Memory Corporation to the Bain-led consortium - a move that Western Digital claimed contravened the two companies' joint venture agreements. However, the agreement indicates that new safeguards to protect Western Digital's investments with Toshiba has also been put in place.
Toshiba president and CEO Dr Yasuo Naruke added that the agreement meant that the company is on track to complete the sale of Toshiba Memory Corporation before the end of March 2018 and, thereby, to avoid a de-listing of the company from the Tokyo Stock Exchange on financial grounds.
Yuji Sugimoto, managing director and head of Japan for Bain Capital claimed that the settlement "represents the best possible outcome for all parties, clearing the way for the Bain Capital-led consortium to complete its acquisition of TMC as planned".
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