Toshiba Corp is one of the biggest conglomerate companies was on the verge of selling their flash memory chip unit which they own in partnership with Western Digital Corp for $18 billion. According to the reports, the deal is put on hold for some time since there were many differences of opinion in the deal related to the preferred bidder. There are allegations against Western Digital Corp of interference in the sale of this memory chip unit by Toshiba and have filed a suit against them. Things have got hideous among the two companies and have complicated the whole situation and prospects of the deal in future. Toshiba has already suffered a huge blow due to the filing of bankruptcy for their nuclear unit Westinghouse which led to a huge cost overrun for the company and they didn’t want the same situation to arise again.
The deal was supposed to be signed on Wednesday at their shareholder’s meeting and the formalities were supposed to start. The auction was heated up when the bidder list included the Japanese Government investors and big investors from the US including Bain Capital. The offers were hurriedly put forth by the bidders in front of the company. The Japanese government is reluctant to let go the control of the semiconductor technology and would prefer to keep it under domestic control but Bain Capital is equally fighting hard to win the bid. Chief Executive Satoshi Tsunakawa said that they are focusing on closing the deal with the best bidder as soon as possible and prospecting to complete all the financial and general formalities related to the deal to be completed before the end of the financial year.
Due to the difference of opinion between these two giants, things have got out of control and they are trying hard to streamline the discussion and get things worked out soon. In defense of Western Digital Corp, they said that their partner Toshiba Corp is breaking the policies of their joint venture because they are looking for the US injunction through which there cannot be any deal without their agreement. Toshiba Corp has trust issues related to the bid offered by the Western Digital Corp Company and hence is skeptical about entering into the deal. On the contrary, Western Digital Corp confirmed that they offered the similar quotation of 2 trillion Yen equivalent to $18 billion which is offered by the other bidders in the auction.