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Western Digital, SanDisk Merger Hinges on Unisplendour's OK


The merger announced Wednesday is, in part, conditioned on the completion of an investment in Western Digital, announced Sept. 30, by China-based Unisplendour, which is making a $3.8 billion equity investment in Western Digital at $92.50 per share, which would give it a 15% stake in the memory company. That deal puts Unisplendour on the Western Digital board and includes lock-up and standstill restrictions.

Tsinghua University is a controlling shareholder of Unisplendour and the investment in Western Digital will be under review by the Committee on Foreign Investment in the U.S. But Western Digital does not expect the CFIUS review to raise an issue because the 15% ownership falls below the "control" standard under the national security panel's rules. Western Digital...