Western Digital Corp. plans to restructure its international operation “shortly after” closing its highly leveraged $17 billion acquisition of SanDisk Corp. in Milpitas.
Shareholders of the Irvine-based storage products maker approved the deal on March 15, creating one of the most diversified players in the volatile storage market, with annual sales of about $19.7 billion.
WD will relocate SanDisk’s intellectual property offshore and integrate the companies’ non-U.S. operations, including supply chain and workforce, according to regulatory filings with the Securities and Exchange Commission.
WD employed 76,449 through July 3, and SanDisk employed 8,790 through Jan. 3, according to the companies’ annual reports. The integration, handled by a 200-member team at WD, is projected to lead to $500 million in annual cost savings within 18 months of closing the transaction and $1.1 billion by 2020.
Areas of cost savings include integrating SanDisk’s NAND flash memory operations with WD’s storage system business, and eliminating positions in sales and marketing, administration, and research and development.
It’s likely SanDisk will take the brunt of cuts, as WD’s local operation isn’t expected to be significantly affected.
SanDisk entered the year with 4,133 employees in operations, 3,125 workers in research and development, 938 employees in sales and marketing, and 594 employees in general and administrative positions.
The transaction will be funded through a mix of cash, WD common stock and new debt of $15.1 billion, and a $3 billion short-term bridge loan to be repaid after the deal closes this year. WD has received commitments of $18.1 billion in financing from JPMorgan Chase Bank, Bank of America and other lenders. The debt will be used to pay part of the purchase price, refinance existing WD and SanDisk debt, and pay transaction-related fees and expenses.
Ex-Broadcom Exec Lands
Eric Brandt, former chief financial officer at Irvine-based chipmaker Broadcom Corp., has taken a board position at Yahoo Inc. as the Sunnyvale company mulls “strategic alternatives.”
Brandt, who was ousted after Broadcom’s $37 billion sale to Avago Technologies Inc. closed last month, joined former Morgan Stanley Managing Director Catherine Friedman as new directors at Yahoo, which is refining its strategy to focus on core businesses, such as search, advertising and content. The company plans to cut 15% of its workforce and close offices in five locations.
Brandt held the top finance post at Broadcom since 2007 and served in a similar post at Allergan Plc. and as chief executive of Avanir Pharmaceuticals. He was among eight top executives and hundreds of others at Broadcom who were cut by Avago Chief Executive Hock Tan, who retained the top post of the new company, Broadcom Ltd., which is based in Singapore and has its U.S. operation in San Jose.
Brandt cashed out $26.7 million after Broadcom’s sale, according to regulatory filings.
Uh Oh
Video footage has surfaced of the first-known accident caused by an autonomous vehicle on the road.
A Lexus SUV operated by Google Inc. is seen slowly brushing against a bus as the driverless car merges into a center lane in Mountain View, home to the Internet search and ad giant.
The footage is believed to show the first time a driverless car caused an accident, although autonomous vehicles have been in accidents caused by human drivers.
Google, along with major automakers, including the Irvine-based units of Kia and Hyundai, are in various stages of bringing autonomous vehicles to the market, although several regulatory hurdles exist on the way to ultimate adoption over the next decade or so.
