Western Digital Corp.’s widespread legal team will head to Northern California this week for their annual global meeting.
The three-day agenda—which includes networking, senior executive briefings and a keynote from former Secretary of State Madeleine Albright—will reinforce the top priorities Chief Legal Officer and Secretary Michael Ray has laid out for the new year for the world’s largest disk drive maker.
The discussions will touch on several topics, from securing a leadership position in solid state drives—which use chips instead of spinning disks to store and transfer data—to fine-tuning a patent and trade secrets program to protect the vast amounts of intellectual property the Irvine-based company consistently spins out.
“We are going to continue to protect and strengthen our family of brands,” Ray said.
Brand Portfolio
His legal team has been at the center of building that brand portfolio, and this year played a crucial role in closing the company’s record $19 billion acquisition of Milpitas-based SanDisk Corp.
The transaction was completed in May, a few months ahead of schedule and one of the reasons why Ray’s staff was honored as top Legal Team at the Business Journal’s seventh annual General Counsel Awards on Nov. 2 at Hotel Irvine (see related coverage, pages 1, 6, 8, 9, 10, 11).
The SanDisk buy created one of the most diversified players in the volatile storage market with a big presence in the consumer, retail and corporate segments.
“There’s a real incentive in some regions to knock that brand off,” Ray said.
WD’s legal team includes about 95 attorneys and 55 support staffers in San Jose, Milpitas, Singapore, the U.K., Italy, Israel and Shanghai, with the largest contingent based at the company’s Irvine headquarters at Park Place.
The department’s extensive expertise and depth was instrumental during corporate and regulatory negotiations on the SanDisk buy, as WD secured antitrust clearance in nine jurisdictions without any conditions and $18.1 billion in financing from JPMorgan Chase Bank, Bank of America and other lenders. The groups also handled executive compensation and employee benefits for the integration, which included managing and licensing SanDisk’s vast IP portfolio.
“I really believe the SanDisk acquisition is seminal to the company thriving in the future,” Ray said.
The record deal was one of four major developments at WD that played out over the last few months of last year.
In late September it announced a $3.8 billion investment from Beijing-based investor Unisplendour Corp. Ltd., which ultimately terminated the deal in March amid a federal inquiry launched by the Committee on Foreign Investment in the U.S., a panel of representatives from various federal agencies that has purview over acquisitions and mergers that involve U.S. businesses and raise national security concerns.
WD in October received long-awaited clearance from Chinese regulators to integrate its $4.8 billion 2012 buy of San Jose-based HGST Inc., but the nod came with stipulations: Western Digital had to offer the HGST and WD brands of products in China and maintain separate sales teams for another two years.
In November WD announced a joint venture with Unisplendour—one of China’s largest IT providers and electronics manufacturers—that provided inroads to capitalize on the company’s deep connections with the Chinese government.
The HGST approval came more than three years after the deal closed and included more than 50 meetings between WD brass and Chinese regulators.
“We spent several years making sure our views were understood,” Ray said.
U.S.-China Track II
WD is a member of the U.S. Chamber of Commerce’s US-China Track II, a group comprised of chief executives and former cabinet-level officials from both countries that aims to strengthen business ties, address trade and investment concerns, and protect IP rights, among other prevalent issues.
The groundwork that led to the HGST integration approval provided a foundation and familiarity to negotiate the SanDisk deal with regulators without stipulations, according to Ray, and could ultimately ease China-U.S business relations for years to come.
“There’s a real possibility for success and growth in both countries,” he said. “Given the size of the company, we have a platform to offer views where storage and memory should go and how regulators and governments might think about that.”
