Western Digital seeks injunction to block Toshiba chip unit sale

[SAN FRANCISCO] Western Digital Corp asked a court in California for an injunction to try to block the sale of the chip unit of Toshiba Corp, its partner in a manufacturing joint venture.

The US company made a filing to the Superior Court of California for San Francisco seeking to stop Toshiba from transferring joint ventures that they have together in preparation for a sale, Western Digital said in a statement Wednesday.

The companies are increasingly at odds as Toshiba tries to raise cash needed to plug a multibillion-dollar writedown following a disastrous investment in the nuclear power equipment business. The legal step may add yet another impediment to an already complicated process.

Western Digital wants to make sure Toshiba's chipmaking operation isn't bought by a competitor, a development that could disrupt its access to chips that are the future of the computer storage business that provides it with the majority of its revenue. The US and Japanese companies have clashed over their agreement and what legal rights Western Digital has to have a say in the sale.

Toshiba previously told Western Digital not to interfere in the sale plans and that it may take legal action. It also said the US company failed to formalise their relationship after Western Digital became its flash-memory manufacturing partner after the acquisition of SanDisk Corp last year.

BLOOMBERG