[December 12, 2017] |
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Toshiba and Western Digital Reach Global Settlement and Agree to Strengthen Flash Memory Collaboration
Toshiba (News - Alert) Corporation (TOKYO: 6502) ("Toshiba"), Toshiba Memory
Corporation ("TMC") and Western Digital Corporation (NASDAQ: WDC)
("Western Digital") have entered into a global settlement agreement to
resolve their ongoing disputes in litigation and arbitration, strengthen
and extend their relationship, and enhance the mutual commitment to
their ongoing flash memory collaboration.
As part of this agreement, TMC and Western Digital (News - Alert) will participate
jointly in future rounds of investment in Fab 6, the state-of-the-art
memory fabrication facility now under construction at Yokkaichi,
including the upcoming investment round announced by Toshiba in October
2017. Fab 6 will be entirely devoted to the mass production of BiCS
FLASH™, the next-generation of 3D flash memory, starting next year. TMC (News - Alert)
and Western Digital similarly intend to enter into definitive agreements
in due course under which Western Digital will participate in the new
flash wafer fabrication facility which will be constructed in Iwate,
Japan.
The parties will strengthen their flash memory collaboration by
extending the terms of their joint ventures. Flash Alliance will be
extended to December 31, 2029 and Flash Forward to December 31, 2027.
Flash Partners was previously extended to December 31, 2029.
The parties' agreement to resolve all outstanding disputes ensures that
all parties are aligned on Toshiba's sale of TMC to K.K. Pangea, a
special purpose acquisition company formed and controlled by a
consortium led by Bain Capital Private Equity, LP ("Bain Capital"). The
parties have agreed on mutual protections for their assets and
confidential information in connection with the sale of TMC, and on
collaborating to ensure the future success of TMC as a public company
following an eventual IPO.
Commenting on the agreement reached today, Dr. Yasuo Naruke, Senior
Executive Vice President of Toshiba Corporation and President and CEO of
TMC said: "We are very pleased to have reached this outcome, which
clearly benefits all involved. With the concerns about litigation and
arbitration removed, we look forward to renewing our collaboration with
Western Digital, and accelerating TMC's growth to meet growing global
demand for flash memory. Toshiba also remains on track to complete our
transaction with the consortium led by Bain Capital by the end of March
2018. This will ensure that TMC has the resources it needs to continue
to innovate and deliver for a fast-growing flash memory market,
particularly in areas driven forward by advances in AI and IoT."
Western Digital Chief Executive Officer Steve Milligan stated: "Western
Digital's core priorities have always been to protect the JVs and nsure
their success and longevity, guarantee long-term access to NAND supply,
protect our interests in the JVs, and create long-term value for our
stakeholders. We are very pleased that these agreements accomplish these
critical goals, allow Toshiba to achieve its objectives, and also enable
us to continue delivering on the power of our platform. I want to thank
the hardworking teams at Western Digital and TMC for the dedication they
have exhibited over the past several months, operating the JVs without
interruption, and we look forward to building upon the success of our 17
year partnership."
Yuji Sugimoto, Managing Director, Head of Japan for Bain Capital said:
"Bain Capital is pleased that Toshiba and Western Digital have resolved
all outstanding legal disputes. The settlement represents the best
possible outcome for all parties, clearing the way for the Bain
Capital-led consortium to complete its acquisition of TMC as planned. We
look forward to supporting TMC to achieve its strategic objectives while
enhancing these important JVs with Western Digital."
As part of the global settlement agreement, Toshiba, TMC and Western
Digital have agreed to withdraw all pending litigation and arbitration
actions.
About Toshiba
For over 140 years, Toshiba Corporation has contributed to a sustainable
future by applying innovative technologies to value creation. Today, our
business domains are centered on the essential infrastructure that
supports modern life and society. Guided by the principles of The Basic
Commitment of the Toshiba Group, "Committed to People, Committed to the
Future," Toshiba promotes global operations that contribute to
realization of a world where generations to come can live better lives.
To find out more about Toshiba, visit www.toshiba.co.jp/worldwide/about/index.html
About Western Digital
Western Digital creates environments for data to thrive. The company is
driving the innovation needed to help customers capture, preserve,
access and transform an ever-increasing diversity of data. Everywhere
data lives, from advanced data centers to mobile sensors to personal
devices, our industry-leading solutions deliver the possibilities of
data. Western Digital® data-centric solutions are marketed
under the G-Technology™, HGST, SanDisk (News - Alert)®, Tegile™, Upthere™
and WD® brands. Financial and investor information is
available on the company's Investor Relations website at investor.wdc.com.
Forward-Looking Statements
This news release contains certain forward-looking statements, including
statements concerning: the NAND flash memory joint ventures; the global
settlement agreement and the resolution of outstanding legal disputes;
investments in Fab 6; Western Digital's participation in TMC's wafer
fabrication facility to be constructed in Iwate, Japan; the production
of 3D flash memory and demand in the flash memory market; Toshiba's
transaction with the consortium led by Bain Capital; a potential initial
public offering by TMC; and expectations and objectives with respect to
the NAND flash memory joint ventures. There are a number of risks and
uncertainties that may cause these forward-looking statements to be
inaccurate including, among others: uncertainties with respect to the
NAND flash memory joint ventures; volatility in global economic
conditions; business conditions and growth in the storage ecosystem;
impact of competitive products and pricing; market acceptance and cost
of commodity materials and specialized product components; actions by
competitors; unexpected advances in competing technologies; the
development and introduction of products based on new technologies and
expansion into new data storage markets; risks associated with
acquisitions, mergers and joint ventures; difficulties or delays in
manufacturing; and other risks and uncertainties listed in Western
Digital's filings with the Securities and Exchange Commission (the
"SEC (News - Alert)"), including Western Digital's Form 10-Q filed with the SEC on Nov.
7, 2017, to which your attention is directed. You should not place undue
reliance on these forward-looking statements, which speak only as of the
date hereof, and Western Digital undertakes no obligation to update
these forward-looking statements to reflect subsequent events or
circumstances.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171212006367/en/
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