Toshiba Passes Western Digital to Sell Memory Division to SK Hynix

Toshiba has reached an agreement with a consortium consisting of investor Bain Capital, which includes SK Hynix, to acquire the nand memory division. The consortium with Western Digital is thus bypassed.

Toshiba has announced that it has signed a Memorandum of Understanding with the consortium of which SK Hynix is ​​a part. A final purchase agreement should be in place at the end of this month. A memorandum of understanding is a document with which the sale is in principle not yet finalized, but it is the prelude to this. Toshiba says it is a non-binding agreement and that negotiations can still be conducted with other candidates.

Western Digital seems to be fishing behind the net with this deal. The American company says it is disappointed, partly because Western Digital has consistently taken a constructive position and has tried to work it out with Toshiba. Western Digital says it remains fully committed to ensuring the viability of the existing joint venture between Western Digital’s subsidiary SanDisk and Toshiba and to protecting Western Digital’s right of approval.

Toshiba and Western Digital have been engaged in a legal battle over the acquisition of the memory division for some time, with the companies accusing each other. For example, WD previously went to an arbitration committee to prevent Toshiba from selling the chip division. Western Digital now says it will continue this procedure and request a ruling from the International Court of Arbitration.

Western Digital may want to increase the pressure with the legal proceedings in order to gain more say in the joint venture. Western Digital previously offered to withdraw from the bid for Toshiba’s nand memory division. In return, WD wanted a stronger position in the current joint venture.

Toshiba spun off its nand memory production on April 1 into a separate company called Toshiba Memory and is selling this part because it is in financial trouble after a series of setbacks at Toshiba’s US nuclear unit Westinghouse. After Samsung, Toshiba is currently the world’s largest manufacturer of nand memory.