World renowned Japanese multinational corporation Toshiba is pondering over whether to partner up with Western Digital or not. This decision will focus on covering the massive revenue loss that the U.S. nuclear plant brought upon the company. If the new partnership receives green light, the chips business Western Digital will receive a minority stake from one of Toshiba’s businesses that deals with flash memories.
There is no official party that is going to be the owner of a minor stake in a Toshiba project due to antitrust and other types of terms. However, Toshiba is more than likely to redirect 20% of the interest that is valued at 200 billion yen and 300 billion yen, which is $1.77 billion to $2.65 billion in the direction of Western Digital. This corporation has decades of experience in the electronics industry, and it is already competing with Toshiba in different sectors. Toshiba and Western Digital are already operating a key flash memory plant in a united form. The facility is located in the Mie Prefecture city of Yokkaichi. These products alone have earned Toshiba a capital of 1.57 trillion yen in 2015 within the semiconductor market.
Even though the sell out is a big possibility, Toshiba Corporation will not lose control over its business. The offer concerns only a minor stake of 20% interest which allows the company to retain the majority stake in the business. The Japanese organization will also manage the new project in group earnings. In the future, it is possible that the unit will be listed in the stock market.
This agreement will not only recharge Toshiba’s funds even though for just a short term, but it will also help the company grow. The new business will obtain bank loans and other types of funds more easily. The company plans to use this additional financial support to invest in research and development.
These rumors appeared first on Wednesday through the Nikkei business publication. The spokesperson of Toshiba confirmed these suspicions, yet stressed out the fact that this is still at the level of debate, and no major decision was taken yet. The chips business seems to be among the few options the company still has to recover from a massive revenue loss that started in 2015 with the purchase of a nuclear plant in U.S.
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