Storage and memory giant Western Digital Corp. (WD) will move forward with plans to separate its businesses, creating two independent public companies: one focused on storage; the other on flash memory.
The move comes after a proposed merger between WD and Japanese memory competitor Kioxia fell apart due to the companies being unable to agree on conditions.
WD said the separation will better position each business to capitalize on different growth opportunities and operate more efficiently with separate, distinct capital structures. The separation is planned to take place in the second half of 2024.
Why separate?
WD said it evaluated alternatives to growth but determined spinning off the flash business would be the best possible solution for both of its businesses.
“During our strategic review process, we thoroughly evaluated strategic transactions that could be value-accretive to Western Digital,” said David Goeckeler, CEO of WD. “However, given current constraints, it has become clearer to the board in recent weeks, that delivering a stand-alone separation is the right next step in the evolution of Western Digital and puts the company in the best position to unlock value for our shareholders.”
The creation of the two separate companies will be subject to the approval of the board of directors as well as customary regulatory conditions.
