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Reuters
TOKYO
Western Digital Corp, the US partner of Toshiba Corp in a semiconductor venture, is in talks with Japanese government-backed investors and would consider a joint bid with them for the chip business, a senior official said on Thursday.
"We want to find a way to ensure we are aligned with INCJ and DBJ,"Mark Long, chief financial officer, told Reuters in an interview, referring to state-backed fund Innovation Network Corp of Japan (INCJ) and the Development Bank of Japan (DBJ).
Asked whether a joint bid was possible, Long said,"It could be."
Teaming up the government-backed players would give Western Digital a big advantage as it would represent a government stamp of approval. But another US bidder, chipmaker Broadcom Ltd, is also in talks with INCJ and DBJ for a joint bid, sources told Reuters, potentially vying with Western Digital for government backing.
The sources said INCJ and DBJ are considering investing in the business as a minority partner - a move that would help the government prevent a sale to bidders it deems risky to national security.
Toshiba, which expects to book a net loss of $9 billion for the business year that began this month, is selling most or all of the prized chip unit to fill a vast balance sheet hole left at its US nuclear unit Westinghouse Electric Co, which last month filed for US bankruptcy protection from creditors.
Toshiba has narrowed the field of bidders for its chip unit to four suitors, people familiar with the process have said: Western Digital, Broadcom, South Korea's SK Hynix, and Foxconn, the world's largest contract electronics maker.
Western Digital, which operates a flash memory chip plant with Toshiba in Japan, has discussed antitrust issues with the conglomerate, and both agreed they shouldn't be an obstacle to a Western Digital bid, Long said.
"Because of our flexibility and the different ways we can participate, our lawyers are very confident that we can address any trust risks in a way that would help get cash to Toshiba very quickly and then allow enough time for any antitrust review as necessary,"he said.
