Sealing the agreement is critical for Toshiba as it has a cascading effect with its end result affecting its listing at the Tokyo stock exchange.
As per sources familiar with the matter at hand, Western Digital and Toshiba Corp have, in principle, agreed to settle a dispute over Toshiba’s plans to sell its $18 billion chip unit.
According to one source, Toshiba’s board has approved a framework for a settlement and is targeting a final agreement by next week.
The potential for Western Digital’s efforts to block the sale of its partner’s NAND memory chip business is seen as the main obstacle to its sale to the Bain Capital LP led consortium.
The agreement, currently under discussions, calls for Western Digital to drop its arbitration claims in exchange for allowing it to invest in a newer line of advanced flash memory chips that are slated to begin production next year, said two sources familiar with the matter at hand.
Sources preferred the cover of anonymity since they were not authorized to speak to the media.
As per Toshiba’s spokesman, while the company was open to a settlement, it would prefer not to provide the details of specific discussions at its board meeting.
“It is not a fact that we have reached an agreement with Western Digital,” said Toshiba’s spokesman.
Western Digital declined to comment.