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The most worrying thing behind Toshiba’s acquisition is antitrust
The negotiations between Toshiba and Western Digital (WD), valued at $18 billion, have reached a critical juncture. However, one key sticking point remains unresolved: the voting rights of Western Digital. Anticipating a rigorous examination under China’s Anti-Monopoly Law, both parties are concerned that any forced sale could result in significant delays or even outright bans. Given that China represents a major market for storage products, the companies are actively exploring strategies to mitigate potential disruptions.
When Toshiba sold its medical systems division to Canon in 2016, the transaction faced lengthy scrutiny. While Japan's Fair Trade Commission completed its review in roughly three months, the Chinese authorities took an additional six months. In some cases, such as Panasonic’s acquisition of Sanyo Electric, the process stretched even further.
According to legal experts well-versed in international regulations, China demands comprehensive documentation to safeguard domestic industries. As a result, antitrust reviews typically last at least six months, with complex cases potentially taking up to two years. Semiconductors, a strategically vital sector, are subject to particularly stringent oversight. Some analysts suggest that China might encourage Toshiba Memory and Western Digital to share technology with competitors or divest certain assets to stimulate market competition.
In 2016, Canon encountered difficulties during the acquisition of Toshiba Medical Systems due to issues with prepayment. The Chinese government imposed a fine, and Japan’s Fair Trade Commission expressed similar concerns, indicating they would reject similar practices in the future.
Meanwhile, global shipping giant Maersk Group faced rejection from Chinese regulators in 2014 when attempting to collaborate with two rivals in the container shipping industry. The decision forced Maersk to abandon its partnership plans entirely.
As Toshiba and WD navigate these challenges, the stakes remain high, with both parties keenly aware of the need to balance regulatory compliance with commercial imperatives.