WD Comments on Toshiba’s Announcement Regarding Flash JV Interests

Western Digital Corp. issued the following statement regarding Toshiba Corporation‘s selection of a consortium led by Korea-based SK Hynix Inc. and Bain Capital Japan, with funding provided by Japanese government funds Innovation Network Corporation of Japan and Development Bank of Japan Inc., as the preferred bidder regarding the sale of Toshiba’s interests in three NAND flash-memory joint ventures operated with Western Digital’s  SanDisk subsidiaries (Flash JVs):

Toshiba continues to ignore both SanDisk’s consent rights and the dual-track legal process currently underway. The language of the relevant agreements is clear: Toshiba has no right to transfer its JV interests to a third party without SanDisk’s consent. SanDisk has not given its consent to any transaction, and will continue to protect its JV interests and preserve its rights through both its request for injunctive relief and the arbitration process.

We note that Toshiba has acknowledged and validated SanDisk’s consent rights on multiple occasions.

Furthermore, certain parties identified in Toshiba’s announcement have previously been notified by Western Digital that it considers any effort to aid Toshiba’s breach of its contractual obligations to SanDisk, including any agreement to directly or indirectly transfer any portion of the joint venture, as tortious interference with contract.

On June 15, 2017, Western Digital’s SanDisk subsidiaries filed a request for injunctive relief seeking to prevent Toshiba from transferring its JV interests until the request of the subsidiaries for injunctive relief in arbitration is decided by the arbitral tribunal. The arbitration filed on May 14, 2017, with the ICC Intenational Court of Arbitration continues to move forward in parallel.

We remain confident in our consent rights and our legal position and look forward to the hearing for injunctive relief, which is scheduled for July 14, 2017.