By Makiko Yamazaki TOKYO (Reuters) – Toshiba Corp has told Western Digital Corp not to interfere in the sale of its prized chip unit, rejecting claims it has breached a joint venture contract and threatening legal action. The clash between Toshiba and Western Digital – both its business partner and
By Makiko Yamazaki
TOKYO (Reuters) – Toshiba Corp has told Western Digital Corp not to interfere in the sale of its prized chip unit, rejecting claims it has breached a joint venture contract and threatening legal action.
The clash between Toshiba and Western Digital – both its business partner and one of the bidders for the chip unit – risks delaying or even quashing an auction that the Japanese conglomerate is depending on to plug a $9 billion hole in its accounts.
Although the two companies jointly operate Toshiba’s main semiconductor plant, Western Digital is not seen as a favoured bidder for the world’s second biggest NAND chip producer, having put in a much lower offer than other suitors, sources with knowledge of the matter, have said.
The U. S. firm has argued the Japanese company is violating their contract by transferring their joint venture’s rights to the newly formed unit and has asked for exclusive negotiating rights. Chief Executive Steve Milligan is currently visiting Japan to press its case.
But in a May 3 letter sent by Toshiba’s lawyers, the TVs-to-nuclear conglomerate disputed Western Digital’ s argument and said it would pursue all available remedies if it saw continued interference in the sale process.
Western Digital’s “campaign constitutes intentional interference with Toshiba’s prospective economic advantage and current contracts. It is improper, and it must stop, ” the letter, which was seen by Reuters on Tuesday, said.
