Western Digital has put forward a new offer for Toshiba's flash memory activities that would give the American company less of a direct voice in management in exchange for a larger share of chip output, the Nikkei reports.
WD would no longer contribute to the purchase price, leaving other members of its consortium to pay the around JPY 2 trillion. These are KKR, Innovation Network Corp of Japan and the government-backed Development Bank of Japan. Instead, WD has asked to buy some chip production capacity at facilities in Yokkaichi, Japan, in which it jointly invests with Toshiba.
The joint venture agreements governing the Yokkaichi facilities stipulate that output is allocated based on ownership of production equipment, which has been split roughly 60-40 in Toshiba's favor since 2009. WD seeks to bring this to 50-50.
This arrangement became a source of friction in early August, when Toshiba said it would invest unilaterally in equipment at a new Yokkaichi fab. Western Digital objected, fearing it would lose access to cutting-edge memory, and insisted that the Japanese conglomerate abide by the existing joint investment framework.The alternative acquisition proposal is also intended to help the deal pass more easily through antitrust review. Toshiba executives are expected to meet 06 September to discuss the new proposal.
