8-KMaterial AgreementsSecurities & ListingRegulation FD+1

WESTERN DIGITAL CORP 8-K Report, Material Agreement (Sep 30, 2015)

Filed September 30, 2015For Securities:WDC

Summary

Western Digital Corporation (WDC) announced on September 29, 2015, a significant strategic investment from Unisplendour Corporation Limited, a Chinese corporation. Unisplendour's subsidiary, Unis Union Information System Ltd., agreed to purchase approximately 15% of WDC's outstanding common stock for $92.50 per share, totaling approximately $3.775 billion. This transaction positions Unisplendour as a substantial minority shareholder and introduces a new strategic partner for WDC. The agreement is subject to various closing conditions, including approvals from U.S. and Chinese regulatory bodies, such as CFIUS and Chinese antitrust authorities. The transaction is expected to close by the first quarter of 2016. An Investor Rights Agreement will be established at closing, granting Unisplendour the right to nominate one director to WDC's board as long as its ownership remains significant and imposing certain voting and standstill restrictions.

Key Highlights

  • 1Western Digital Corp. entered into a stock purchase agreement with Unis Union Information System Ltd. (a subsidiary of Unisplendour Corporation Limited) for the sale of 40,814,802 shares of common stock.
  • 2The aggregate purchase price for these shares is approximately $3.775 billion, at a price of $92.50 per share.
  • 3The transaction will result in the Investor owning approximately 15% of WDC's total issued and outstanding shares.
  • 4Closing of the transaction is contingent upon several regulatory approvals, including from U.S. antitrust authorities and multiple Chinese governmental bodies.
  • 5An Investor Rights Agreement will be implemented, granting the investor board nomination rights and imposing voting, standstill, and a five-year lock-up on the acquired shares, with phased release provisions.
  • 6The transaction is expected to be completed in the fourth quarter of 2015 or the first quarter of 2016.

Frequently Asked Questions

WDC has entered into a stock purchase agreement where Unis Union Information System Ltd., a subsidiary of Unisplendour Corporation Limited, will purchase approximately 15% of WDC's outstanding common stock for $92.50 per share, totaling about $3.775 billion. This establishes a significant strategic partnership and investment.

The closing is subject to several conditions, including obtaining necessary regulatory approvals from U.S. antitrust authorities and various Chinese regulatory bodies (such as the Ministry of Commerce, Ministry of Education, NDRC, and SAFE). Additionally, Unisplendour's shareholders must approve the transaction, and the Guarantor (Unisplendour Corporation Limited) must guarantee the Investor's obligations.

The Investor will have the right to nominate one director to WDC's Board of Directors as long as they hold a significant percentage of shares. They will also be subject to a customary standstill restriction, preventing further purchases of WDC stock beyond the initial 15%, and a five-year lock-up period on the acquired shares, with provisions for phased release over time.

Western Digital anticipates that the transaction will close either in the fourth quarter of calendar year 2015 or the first quarter of calendar year 2016.