Western Digital offers to exit Toshiba chip bid for better joint-venture terms

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Western Digital has offered to drop out of a bid for Toshiba’s lucrative semiconductor business in return for a stronger position in the two companies’ chip joint venture, two sources said on Tuesday.

Toshiba needs to sell the chip unit to plug a giant hole in its finances caused by the failure of the conglomerate’s U.S. nuclear business, but the deal has snagged on such issues as antitrust concerns if the U.S. disk-drive maker were a major owner.

To help close the deal, California-based Western Digital has told Toshiba it is prepared to pull out of a consortium bidding for the business in order to address such concerns, said the sources, one with direct knowledge of the transaction and one who was briefed on this development.

In return, Western Digital is seeking to strengthen its position in the joint venture operations, they said.

A Western Digital spokeswoman said she could not comment on details of the talks. Toshiba was not immediately available for comment outside Tokyo business hours.

Toshiba and Western Digital, which jointly invest in Toshiba’s key plant in central Japan, failed to seal a deal by Toshiba’s target date last week due to disagreement over the U.S. firm’s future stake in the business. Source: Reuters