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Western Digital's flash memory business may become independent

Western Digital's flash memory business may become independent

More than six years ago, U.S.
hard drive maker Western Digital Corporation acquired the assets of solid-state memory maker SanDisk, which produced the respective chips in partnership with Toshiba, which later transferred the business to Kioxia.
Now, under pressure from investors, WDC is considering how to structurally separate the solid-state memory business from its drives.Image source: Western Digital CorporationAccording to Bloomberg, citing company representatives, the author of the idea is Elliott Investment Management, which represents the interests of several institutional investors.
The Board of Directors of Western Digital has considered the strategic alternatives for both of its key units, as a result of business for the production of solid state drives can be separated structurally, and its development will attract additional capital.
Analysts have long convinced the WDC administration that the two businesses separately are worth much more than the capitalization of a single company.Representatives Elliott explained that Western Digital is ready to decide to completely separate the flash memory business, and investors may provide financial resources for the development of a future independent company, without specifying the scale of the proposed investment.
By the end of 2023, investors expect the separation of the \"solid-state assets\" will allow Western Digital to raise the price of the main company's shares to $100 from the current $60.32.
The company's shares have lost 7.5 percent since the beginning of this year, and the news of the impending restructuring boosted the price by one percent at most.Elliott owns a 6 percent stake in WDC and also intends to provide $1 billion for the restructuring, which will be used to develop its solid-state memory business.
The new company's capitalization could reach $17 billion to $20 billion, according to investors.
That's about as much as the entire Western Digital has now.
Negotiations with Elliott are in full swing right now, and WDC management can't yet say exactly what the chosen strategic alternative will be.
The parties are bound by a non-disclosure agreement regarding public discussions of the decisions made.

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