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Dec 12, 7:20 PM EST

Toshiba, Western Digital deal to allow sale of chip unit

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Toshiba, Western Digital deal to allow sale of chip unit

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TOKYO (AP) -- Toshiba and Western Digital say they have resolved a dispute that was preventing the embattled Japanese electronics giant from selling its flash memory unit to raise cash to stay afloat.

The companies said Wednesday that the deal allows Western Digital to participate in future investments in their joint venture. That clears the way for a consortium led by Bain Capital to buy Toshiba Memory Corp.

The deal settles disputes in litigation and arbitration over Western Digital's objections to the planned sale.

The two companies said they will jointly invest in a new computer chip fabrication unit at their joint venture in central Japan and in another facility in northeastern Japan's Iwate prefecture.

The plan calls for Toshiba Memory Corp. to eventually sell shares through an initial public offering.

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