There has been growing interest by Chinese tech companies in U.S. investments, but national security concerns have squashed some of their efforts. Now one Chinese company hopes to take a small step into the U.S. market.
Earlier this week, California-based Western Digital Corporation announced a deal with a division of the Chinese tech company Tsinghua Unigroup, called Unisplendour. Tsinghua will pay $3.78 billion for a 15% share of Western, paying 34% above Tuesday’s closing share price of Western’s stock, according to the Los Angeles Times.
Western Digital has more than 76,000 employees and had revenues of over $14 billion this last fiscal year. But the company’s stock has suffered this year, with slow growth leading to significant declines.
Earlier this year Tsinghua offered $23 billion in an attempt to acquire the U.S. semiconductor maker Micron Technology Inc, but that deal fell through on national security concerns.
The Unisplendour stake in Western may have an easier road, as the company is acquiring only a minority position, not a controlling interest as in the failed Micron takeover. Still, the deal is expected to be reviewed for national security concerns by an interagency group led by the Treasury Department.
Western Digital expects the cash from the deal to help propel further growth, while Unisplendour aims to expand its overseas portfolio.