Western Digital drops challenge to Bain consortium's Toshiba deal

The agreement between Toshiba and Western Digital removes the principal obstacle to the deal, which was approved by Toshiba shareholders in October. Under the terms of the purchase, the consortium – which also includes the Innovation Network Corporation of Japan (INCJ) and Development Bank of Japan (DBJ), along with strategic investors such as Apple, Dell Kingston, and Seagate – will pay JPY2 trillion ($17.8 billion) for TMC.

Western Digital's SanDisk division operates a Nand flash manufacturing plant in Japan as a joint venture with Toshiba, and the US-based company has claimed their JV agreement gives it veto power over any sale of TMC. In addition to seeking an injunction and arbitration to block the sale, Western Digital also submitted its own bid for the business earlier this year in partnership with KKR.

Toshiba and Western Digital have also agreed to extend the terms of their partnership and participate jointly in future investment rounds in the JV's new factories scheduled for completion next year. Bain had previously warned that Western Digital's efforts to frustrate the sale could jeopardize the company's relationship with Toshiba and their joint venture.

"Western Digital's core priorities have always been to protect the JVs and ensure their success and longevity, guarantee long-term access to NAND supply, protect our interests in the JVs, and create long-term value for our stakeholders," said Western Digital CEO Steve Milligan in a statement. "We are very pleased that these agreements accomplish these critical goals, allow Toshiba to achieve its objectives, and also enable us to continue delivering on the power of our platform."

Bain recently completed its tender offer for Japanese advertising agency Asatsu-DK, acquiring a majority stake in a deal that values the company at JPY153 billion. In that deal too the transaction was complicated by legal objections from a partner of the target corporation – London-based media firm WPP Group – which were later dropped after the parties settled their differences.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• North Asia
• Technology
• Buyouts
• Japan
• Bain Capital Asia
• Innovation Network Corp. of Japan (INCJ)
• The Development Bank of Japan (DBJ)