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The move may help Toshiba finally seal a deal to sell its prized
unit after months of delays, providing it with funds to cover
billions of dollars in liabilities linked to its failed U.S.
nuclear business Westinghouse.
A consortium including Western Digital, U.S. private equity firm
KKR & Co, the state-backed Innovation Network of Japan and
Development Bank of Japan were previously offering around 1.9
trillion yen ($17.4 billion) for Toshiba's chip business,
according to people familiar with the talks.
Those talks had stalled in recent weeks, however, as the two
sides struggled to come to an agreement over Western Digital's
stake in the business, which the Japanese company wanted to
limit in an attempt to avoid prolonged antitrust reviews,
sources have said.
To help close the deal, California-based Western Digital has
told Toshiba it is prepared to pull out of a consortium bidding
for the business in order to address such concerns, said the
sources, one with direct knowledge of the transaction and one
who was briefed on this development.
In return, Western Digital is seeking to strengthen its position
in the joint venture operations, they said.
Toshiba's board is due to meet on Wednesday to discuss the deal,
the sources said.
A Western Digital spokeswoman said she could not immediately
comment. Toshiba said it could not comment on details of the
talks.
Toshiba and Western Digital, which jointly invest in Toshiba's
key plant in central Japan, failed to seal a deal by a
previously-planned deadline last week due to disagreement over
the U.S. firm's future stake in the business, sources have said.
(Reporting by Kentaro Hamada and Makiko Yamazaki; Editing by
William Mallard/Keith Weir)
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