Toshiba tells Western Digital to stop meddling in $20bn chip sell-off

Toshiba issued a strongest warning to date in a legal battle over whether its right to sell its $20m chip business is restricted by the terms of its joint venture with Western Digital.

The sale of Toshiba’s extremely profitable Nand Chip making business is at the centre of efforts to shore up the finances of a group hit by big write downs on its nuclear business.

Western Digital jointly operates a Nand flash manufacturing plant in Japan with Toshiba. The joint venture chips produced accounts for 17 per cent of Toshiba’s sales.

Toshiba’s lawyers accused the US based Western Digital of mounting an improper campaign of “intentional interference” in the attempt to sell its chip business.

Western Digital demanded exclusive negotiation rights in a letter to Toshiba’s board in April 2017, accusing Toshiba that the sale of the chip venture without its consent would be a breach of their contractual agreement.

Toshiba, however, rejected the argument and threatened to block Western Digital employees from Toshiba premises involved in the chip making joint venture.

The dispute causes quiet an impediment ion Western’s Digital’s efforts to launch a joint bid for Toshiba’s flash memory business with a government-backed fund and private equity group KKR.