Western Digital set to buy Toshiba's chip business

Toshiba might score a windfall from its memory chip sale

Toshiba might score a windfall from its memory chip sale

The sale iinvolves 18 Billion and is sold to a consortium in which Western Digital (who a year ago acquired Sandisk as well) has a large stake.

The consortium's overall investment is now expected to reach about ¥2.4 trillion, a level high enough to allow Toshiba Memory to compete with South Korea's Samsung Electronics Co., the world's largest memory producer in terms of sales, one source said. Accern also assigned news headlines about the data storage provider an impact score of 49.3401813641925 out of 100, meaning that recent press coverage is somewhat unlikely to have an effect on the stock's share price in the next several days.

Apple, which uses Toshiba's NAND flash memory chips in its iPhones, is concerned about losing pricing power if Western Digital is running the operation, the sources said on Friday.

Toshiba is now trying to offload its NAND unit with a consortium including Western Digital and another containing SK Hynix standing as the top bidders. Following a string of losses from the bankruptcy of Westinghouse (Toshiba's nuclear energy division in the United States), a sale of the chip division could remove uncertainty for stockholders over the future of the company. It would also be a remarkable victory for Western Digital, Toshiba's joint venture partner for its chip business, after relations with the Japanese firm frayed to point where other bidders were chosen first and the USA firm initiated legal action that threatened to derail any deal. Nikkan Kogyo said the two companies are in the final stages of talks to work out how big a stake Western Digital will eventually have in the chip unit.

Toshiba is desperate to sell the unit to cover billions of dollars in liabilities from its bankrupt USA nuclear unit Westinghouse.

But whether Toshiba will really be able to sell Toshiba Memory remains in question, as the sale could be blocked if the legal case goes against the Japanese company.

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