Storage giant Western Digital is now partially owned by a Chinese state corporation, thanks to a deal that sees Unisplendour Corporation paying $3.775 billion for a 15 per cent stake in the company.
Best known for its various spinning-rust storage products, Western Digital was founded in 1970 and rapidly rose to success. In the years since, it has acquired competitors - most recently Hitachi, which it operates as a subsidiary - but the company appears to be hungry for cash to help it gain footholds in new markets and with new technologies. As a result, it has signed a deal with Unisplendour (Unis), a Chinese state-owned investment vehicle, that will see a Unis subsidiary splash out $3.775 billion for a 15 per cent stake in the firm.
'The equity investment by Unis will help facilitate our growth as we look to capitalise on the many opportunities and changes within the global storage industry,' claimed Steve Milligan, president and chief executive officer at Western Digital, of the deal. 'This investment reflects Unis’ strong support for Western Digital’s value-creation efforts.'
'We are excited to establish a relationship with Western Digital, a leading company in the storage industry with a capable and talented management team and workforce,' added Weiguo Zhao, chair of Tsinghua Unigroup and Unisplendour Corporation, of his company's latest investment. 'We believe this long-term investment will serve as a constructive collaboration model for Chinese and U.S. companies to work together for success.'
The deal is, as usual, subject to regulatory approvals and may yet be blocked by government divisions who do not like the thought of a Chinese state actor having such a large stake in a company which provides technology for use on US soil.