Western Digital Comments on Toshiba-Bain Deal

Western Digital Corp. commented on Toshiba Corporation‘s proposed transfer of its interests in its NAND flash-memory joint ventures operated with Western Digital’s SanDisk subsidiaries (JVs) to a consortium led by Korea-based SK Hynix Inc. and Bain Capital:

Our goal all along has been to reach a mutually beneficial outcome that addresses all issues for Toshiba and its stakeholders, and most importantly, ensures the longevity and continued success of the JVs. Throughout our ongoing dialogue with Toshiba, we have remained flexible and have submitted numerous proposals that have specifically addressed all of Toshiba’s concerns. We are disappointed that Toshiba would take this action despite Western Digital’s tireless efforts to reach a resolution that is in the best interests of all stakeholders.

Furthermore, it is troubling that Toshiba would pursue this transaction without SanDisk’s consent, as the language in the relevant JV agreements is unambiguous, and courts have entered multiple rulings in favor of protecting SanDisk’s contractual rights. Toshiba has also acknowledged and validated SanDisk’s legitimate consent rights on multiple occasions.

Western Digital remains confident that SanDisk will succeed on the merits of its arbitration requests filed on May 14, 2017, and July 5, 2017, and those cases continue to move forward in the ICC International Court of Arbitration. In addition, on July 28, 2017, the Superior Court of California for the County of San Francisco entered a stipulated order preventing Toshiba from closing any transfer of its JV interests without providing at least 14 days advance notice to SanDisk.