{"id":7614,"date":"2023-10-31T15:14:11","date_gmt":"2023-10-31T15:14:11","guid":{"rendered":"https:\/\/infundpros.com\/markets\/stocks\/western-digital-to-split-flash-memory-unit-refinance-debt\/"},"modified":"2023-10-31T15:14:12","modified_gmt":"2023-10-31T15:14:12","slug":"western-digital-to-split-flash-memory-unit-refinance-debt","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=7614","title":{"rendered":"Western Digital to split flash memory unit, refinance debt"},"content":{"rendered":"
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\u00a9 Reuters. FILE PHOTO: The logo of Western Digital Corporation is displayed at the company’s headquarters in Tokyo, Japan, May 27, 2019. REUTERS\/Yoshiyasu Shida\/File Photo<\/span>
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By Samrhitha A and Aditya Soni<\/p>\n

(Reuters) -Western Digital said on Monday it would spin off its flash memory business that has been grappling with a supply glut after talks of merging the unit with Japan’s Kioxia stalled, and also announced a fresh capital raise to refinance some of its debt.<\/p>\n

The split will leave the data storage products maker with its traditional hard-disk drive business and create two publicly traded firms, giving into demands from activist investor Elliott, which said on Monday it supports the move.<\/p>\n

Western Digital <\/span><\/span> (NASDAQ:) shares closed 7.3% higher at $41.80 on the news, but fell about 6% in extended trading after it announced it planned to raise capital through the sale of $1.3 billion worth of convertible bonds, due 2028. The company said it would use the proceeds to refinance a portion of its debt due 2024. <\/p>\n

The split clears years of uncertainty over Western Digital’s flash memory unit that was built through its $19 billion purchase of SanDisk in 2016 and caters to the smartphone and computer industries.<\/p>\n

Demand for flash chips has slumped after the pandemic, leaving the market awash in supply and increasing the pressure on chipmakers to consolidate.<\/p>\n

Since 2021, Western Digital and its manufacturing partner Kioxia have been in talks for a merger that would create a company that controls a third of the global NAND flash market.<\/p>\n

The latest attempt at the deal stalled last week after opposition from Kioxia investor SK Hynix, which is a major memory chip maker and rival to both firms, sources told Reuters.<\/p>\n

“Given current constraints, it has become clearer … that delivering a stand-alone separation is the right next step in the evolution of Western Digital,” CEO David Goeckeler said on Monday.<\/p>\n

The company, which also reported quarterly results, did not give more details on the talks with Kioxia during its post-earnings call.<\/p>\n

But it said it remains open to any alternatives that deliver “superior value” to the planned separation, which is tax-free and targeted for the second half of 2024.<\/p>\n

Kinngai Chan, analyst at Summit Insights Group, ruled out any other approaches for the flash memory business. “We are not expecting any other company to bid,” he said.<\/p>\n

Western Digital forecast a second-quarter loss that was smaller than Wall Street estimates. It also posted better-than-expected results for the July-September period as the pace of declines in its flash business slowed.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a9 Reuters. FILE PHOTO: The logo of Western Digital Corporation is displayed at the company’s headquarters in Tokyo, Japan, May 27, 2019….<\/p>\n","protected":false},"author":1,"featured_media":7615,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[],"class_list":{"0":"post-7614","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-stocks"},"yoast_head":"\nWestern Digital to split flash memory unit, refinance debt | inFundPros<\/title>\n<meta name=\"description\" content=\"\u00a9 Reuters. FILE PHOTO: The logo of Western Digital Corporation is displayed at the company's headquarters in Tokyo, Japan, May 27, 2019. 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