Japanese electronics company Toshiba Corp. has been looking to sell its lucrative flash memory business for more than half a year, and interested businesses included some of the biggest companies in the tech industry. Today, Toshiba finally announced its preferred bidder for the deal, and it has decided on a consortium that includes American buyout firm Bain Capital and several Japanese government investors.

According to Reuters, the potential deal is worth more than $18 billion, which would be a welcome windfall for Toshiba as it struggles to turn a profit and pay back its debts. Toshiba said that it hopes to complete the sale by as early as next Wednesday.

Until today’s announcement, one of the forerunners in the bidding war was Taiwanese manufacturer Foxconn Group, which reportedly offered a bid of $27 billion. Foxconn later announced that it had formed a partnership for the deal that included Apple Inc., Dell Inc. and Kingston Technology Corp. The company also claimed that Amazon.com Inc. had expressed interest in joining its partnership.

A possible explanation for why Toshiba decided not to go with Foxconn is the company’s strong factory presence in China, which does not sit will with the Japanese government. The government said that it would block any potential deals that could lead to Toshiba’s key chip technology leaving the country.

It seems that Toshiba’s investors were not reassured by today’s announcement, as the company’s stock dipped by more than 2 percent today. Toshiba’s announcement also earned some harsh words from American computer storage company Western Digital Corp., which has been trying to block the deal based on conflicts regarding joint-venture agreements that Toshiba has with its subsidiary, SanDisk.

Although Western Digital is actually part of the consortium that won the bid, the company still argues that Toshiba cannot sell its joint ventures without permission. Western Digital filed for arbitration against Toshiba, and today the company released a statement criticizing Toshiba’s steps toward completing the sale of its memory business.

“Toshiba Corporation continues to ignore both SanDisk’s consent rights and the dual-track legal process currently underway,” Western Digital said in a statement. “The language of the relevant agreements is clear: Toshiba Corporation has no right to transfer its JV interests to a third party without SanDisk’s consent.”

Western Digital added, “We remain confident in our consent rights and our legal position and look forward to the hearing for injunctive relief.” That hearing is scheduled for July 14.

Photo: Toshiba