Seagate pledged not to acquire stake in Toshiba for the next 10 years: Bain Capital

Among Western Digital concerns for blocking Toshiba’s NAND memory sale was that its direct competitors, Seagate Technologies and SK Hynix will gain access to proprietary information from the acquisition. Here is how these concerns have been addressed by Bain Capital.

As per a documents from Bain Capital LP, the leader of the group that is set to takeover Toshiba Corp’s NAND memory chip business, Seagate Technology PLC, a member of the Bain Capital led group, has pledged not to buy any stake in Toshiba for the next decade.

The pledge came in the wake of Western Digital Corp objecting to the sale of Toshiba’s prized assets. Seagate is a direct competitor to Western Digital in the hard disks.

Despite the pledge, Western Digital still continues to oppose the sale, which occurred without its consent and has sought an injunction at the International Court of Arbitration.

Bain has confirmed the contents of the document.

Both Toshiba and Seagate did not provide immediate comment.

Western Digital has also protested the participation of South Korean chipmaker SK Hynix, the world’s fifth largest NAND memory chipmaker, in Toshiba’s memory chip acquisition.

Toshiba has clarified, SK Hynix’s stake in its NAND memory chip business will be limited to not more than 15%; moreover it will also be prevented from accessing proprietary information to the chip unit for the next 10 years.

In its document, Bain Capital said, it “will control the board and governance of the company.”

Seagate has committed upto $1.25 billion to finance the purchase of the chip unit and expects to enter into a long-term supply agreement.

“This agreement has the opportunity to increase the potential for meaningful future revenue growth from Seagate’s NAND storage portfolio,” said Dave Mosley, Seagate’s Chief Executive Officer.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s