SanDisk announced today that it has entered into an agreement with Toshiba to sell about 30% of its stake in the companies two flash memory joint ventures. Once the deal is complete, Toshiba will be the sole owner of 30% of the total production capacity, with the remaining 70% split equally between the two companies. While financial details have not been announced, SanDisk expects to receive cash and cut equipment lease obligations by about $1 billion.
SanDisk® (NASDAQ:SNDK) announced today that it has entered into a non-binding memorandum of understanding (MOU) with Toshiba Corporation to sell approximately 30 percent of the current manufacturing capacity of the parties’ joint ventures to Toshiba. The move will significantly reduce SanDisk’s capital spending, further strengthen its balance sheet and reduce NAND flash memory production commitments. SanDisk expects to receive cash and reduce equipment lease obligations by approximately $1 billion through this transaction.
SanDisk and Toshiba will continue to be equal partners for the approximately 70 percent capacity of the Fabs that remain in the joint ventures. SanDisk will have the option to purchase a part of the transferred capacity from Toshiba on a foundry basis and will continue to invest up to 50% in future Fab 4 expansions and technology transitions in Fabs 3 and 4. The parties will continue their existing joint technology development in advanced NAND and 3D read/write memory. SanDisk expects the transaction to be completed in the first quarter of 2009.
“We appreciate Toshiba’s strong support for SanDisk through this agreement. This is expected to reduce our capital spending, strengthen our financial position and increase our business flexibility while maintaining the economies of scale of Fabs 3 and 4,” said Dr. Eli Harari, chairman and chief executive officer, SanDisk.
