Pavel Alpeyev and Ian King, Bloomberg:
Tempers first flared at an April meeting at Western Digital’s headquarters, where [Western Digital CEO Steve Milligan] sat across from Toshiba’s head of the chip unit, Yasuo Naruke. The American CEO made a low-ball offer of $13 billion for the business and said he’d use his rights as Toshiba’s partner to block a sale to anyone else, according to people who attended the meeting.
With a helmet of dark hair parted neatly on the side, Naruke projects an image of calm restraint, but the 62-year-old engineer fumed the whole way home to Tokyo on the airplane, according to the people. He believed Milligan was trying to take advantage of Toshiba’s problems to buy the chip business on the cheap, they said.
Ultimately, a Bain Capital consortium that includes Apple bought the division for $18 billion, which means a couple of things: Western Digital blew a major chance to own a big slice of one of the hottest industries on the planet, and this acquisition will likely be seen in the future similarly to how we now see Apple’s purchase of P.A. Semi in 2008. The biggest differences between the acquisition of P.A. Semi and this Toshiba buy are in exclusivity — Apple is just one of several buyers — and total price tag. But even if Apple won’t be taking over Toshiba’s entire production, it should give them an opportunity to lower their costs — and, hopefully, prices to consumers — in a complicated market.