Western Digital Weighed Strategic Alternatives Including Business Split

Western Digital Corp WDC had weighed strategic alternatives, including splitting its businesses focused on traditional hard drives for computers and flash memory.
Western Digital settled with activist investor Elliott Management Corp calling for the $19 billion company to consider splitting into two, the Wall Street Journal reports.
Previously Elliott disclosed a 6% stake in Western Digital and urged the company to explore a breakup that could see the stock price could climb above $100 per share by the end of 2023.
Also Read: Here’s Why Analysts Remained Bullish On Western Digital Post Q3
Elliott expressed interest in investing an additional $1 billion or more in equity in a potential spinoff or merger of the flash business with another industry player.
In 2020, Western Digital looked to form separate units for its two businesses.
Japanese chip maker Kioxia Holdings Corp was still open to a possible deal with Western Digital after discussing an agreement to create a memory-chip powerhouse. The talks slowed due to a persistent decline in Western Digital’s shares.
Kioxia’s business would be a logical fit for Western Digital’s flash unit, which Elliott estimated could command an enterprise value of $17 billion to $20 billion, roughly equal to Western Digital’s market cap before its shares surged following Elliott’s campaign.
Price Action: WDC shares closed higher by 4.54% at $62.43 on Tuesday.
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