How does the acquirer of Toshiba's memory chip business warn Western Digital?

According to a report on June 24th, Beijing time 10, Toshiba chip business acquisition consortium led by private equity investment company Bain Capital (hereinafter referred to as "acquisition consortium") warned Western Digital that if it wants to continue its cooperative relationship, it must give up its attempt to overturn the transaction and settle legal proceedings.

The acquisition consortium reached an agreement with Toshiba to spend $654.38+08 billion to acquire the latter's chip business, but Western Digital is seeking to resort to legal means in the United States to stop this transaction. Western Digital said that as a partner of Toshiba Joint Venture, any transaction to sell the chip business needs its consent.

David Gross-Loh, managing director of Bain Capital, which promoted the acquisition of Toshiba's chip business, refuted Western Digital's statement in his first public interview on the dispute with Western Digital. He said that the prosecution of Western Digital was based on its distortion of rights, and the transaction did not pose any threat to the Western Digital business. However, he warned that Western Digital may not be able to buy flash memory chips due to prosecution.

Gross-Lowe said, "Consumption is not good for Western Digital. It is wise to repair the relationship between the two companies, and the relationship between the two sides has not reached the point of irreparable. "

The acquisition consortium compiled a document listing 16 frequently asked questions and answers related to the acquisition of Toshiba's chip business, among which 9 questions were related to the relationship between Western Digital. One of the questions said that Western Digital "misread or misinterpreted" the agreement with Toshiba; Another problem is that the cooperation periods between Western Digital and Toshiba's three joint ventures are 202 1, 2025 and 2029 respectively, which means that Western Digital may lose the right to buy flash memory chips after the cooperation period expires.

Open contradiction is undoubtedly a means for the acquisition consortium to put pressure on the management of Western Digital, aiming at prompting them to negotiate and eliminating a key obstacle to the completion of the acquisition of Toshiba chip business. In order to make up for the deficit of nuclear power business in the United States, Toshiba needs to complete the transaction of selling chip business before the end of March next year, otherwise its stock may be delisted by Tokyo Stock Exchange. This transaction also needs to be reviewed by the anti-monopoly supervision department.

On the eve of Toshiba's announcement to sell its chip business, Western Digital reiterated its legal claim, warning that the legal process would not end until 20 19, and the prospect of this transaction was not good. Western Digital is still seeking a court injunction to prevent Toshiba from selling its chip business. The two sides are currently negotiating.

John Hueston, a Western Digital lawyer, said last month, "In view of Toshiba's lack of sincerity to solve the problem in a constructive way with its joint venture partners, we will continue the legal process." Western Digital did not comment further.

Last year's acquisition of SanDisk made Western Digital a partner of Toshiba and bought flash memory chips from Toshiba's factory in Japan.

Gross-Lowe said, "When acquiring SanDisk, Western Digital may not fully understand what rights it has acquired. We have done a lot of research and really understood the relevant contracts. The cooperation between the two parties at that time was limited to equipment procurement and financing. If the two sides fail to reach a new agreement, the cooperation will be terminated. "

Gross-Lowe said that the factory and production technology are Toshiba, and the employees are also recruited by Toshiba. When the agreement expires, the equipment of the joint venture should be scrapped and worthless. In the rapidly changing semiconductor industry, new investments and new agreements are necessary. This is why time is not on the side of Western Digital.

Toshiba has expressed its intention to invest in a new factory named Fab 6 alone, but Western Digital said it violated their cooperation agreement. According to western data, its contribution to the joint venture company far exceeds the funds for purchasing equipment.

Western Digital sued Toshiba's chip business to prevent competitors such as SK Hynix and Seagate from getting their hands on Toshiba's chip business. Gross-Lowe said that SK Hynix and Seagate agreed not to participate in the management of the new company and would not seek to increase their shares for 10 years. He said that all members of the consortium hope that Toshiba's memory business will develop healthily and remain independent. Trading and investing in new factories is only beneficial to Samsung. "Only Samsung is happy about this." ?