Irvine-based Western Digital Corp. said a unit of China-based Unisplendour Corp. Ltd. won’t buy a 15% stake in the storage products maker for $3.8 billion after a U.S. government agency said the deal would undergo a formal review.
Unis Union Information System Ltd. terminated the agreement, announced in September, after the Committee on Foreign Investment in the United States, a Treasury Department agency that reviews some foreign transactions involving U.S. companies, said it would look at the deal.
The termination doesn’t end the Western Digital and Unisplendour joint venture in China announced in October, in which Unisplendour will hold a 51% stake, and neither company incurs break-up fees as a result of the termination, but the move triggers changes in Western Digital’s proposed purchase of Milpitas-based competitor SanDisk Corp. The deal’s value was originally set at $19 billion in cash and stock.
Alken Asset Management in London, which owns 2.2% of Western Digital, last week said it plans to vote against the acquisition.
—Paul Hughes
