Western Digital Corp. is considering proposing a plan to acquire Toshiba Corp.’s flash memory unit for more than ¥2 trillion, informed sources have said.
Western Digital has offered to buy Toshiba Memory for ¥1.6 trillion, far lower than the roughly ¥2 trillion the struggling parent aims to raise through its sale.
But the U.S. firm, Toshiba’s memory business partner, has been at odds with the struggling Japanese electronics giant over the chip unit’s sale. The sources, however, said that Western Digital is now examining an option of providing Toshiba with funds through purchases of corporate bonds and joining the Japan-U.S. team of bidders to raise the acquisition price.
Such a plan would likely ease concerns by Toshiba of prolonged screenings by anti-monopoly authorities, the sources added.
Toshiba is hurrying to sell a majority stake in the unit to raise at least ¥2 trillion to eliminate its negative net worth by next March in a bid to avoid a delisting from the Tokyo Stock Exchange.
The firm is weighing the proposal with another bid of over ¥2 trillion by U.S. chip-maker Broadcom Ltd., whose business has little overlap with Toshiba’s chip unit and is seen as being clear of anti-monopoly issues.
Toshiba’s plan to sell the stake in the unit was cast into doubt when Western Digital voiced its opposition to any sale to a third party.
The standoff escalated when the U.S. data storage company filed to block the sale with the International Court of Arbitration.
The latest offer is seen as a concession by Western Digital to let the U.S. firm participate in the deal while allowing Toshiba to sell the unit in time to avoid delisting.
Taiwan’s Hon Hai Precision Industry Co. and South Korea’s SK Hynix Inc. have also tendered bids for the chip unit, but are apparently not under serious consideration due to concerns within the Japanese government of a technology drain.