Western Digital Corp. (NASDAQ: WDC), a leading data storage solutions company, announced today a significant step in its corporate evolution. The Board of Directors has unanimously approved a plan to divide its hard disk drive (HDD) and Flash solutions businesses into two independent public companies. This strategic division aims to better position each franchise to capitalize on specific market growth opportunities, lead technological and product innovation, and operate more efficiently with differentiated capital structures.
“By separating our HDD and Flash businesses, we are unlocking significant value for Western Digital shareholders, allowing them to participate in the potential of two industry leaders with distinct growth and investment profiles,” said David Goeckeler, CEO of Western Digital. “Each of the companies is in a strong position to succeed independently, and the actions we are announcing today will further enable each to drive long-term success in the years to come.”
The company’s strategic review process has concluded that the spin-off of its Flash business is the most viable and executable alternative at this time to realize its full value. With improving market conditions, Western Digital believes that implementing a separate separation strategy is favorable for increasing value for its shareholders.
“We have emerged from a historic cyclical downturn in storage, and the changes implemented in recent years are evident in the performance of each business relative to its competitors. As we move into fiscal 2024, we see an improved market environment in both businesses and will remain open to strategic opportunities that unlock even more value in our HDD and Flash investments and assets,” added Goeckeler.
The final decision to separate will be subject to Board approval, execution of definitive documentation, receipt of opinions or rulings on the tax-free nature of the transaction, and satisfaction of customary conditions, including effectiveness of appropriate filings with the U.S. Securities and Exchange Commission (SEC), completion of audited financial statements, and availability of financing.
Western Digital will hold its first quarter fiscal 2024 earnings conference call on Monday, October 30 at 5:30 a.m. Pacific Time, which will include a discussion on the creation of the two independent companies. A webcast and related presentation providing further clarity on the separation process and financial characteristics of each business will be available at investor.wdc.com. The conference call will be archived and available on this website shortly after the call concludes.
In carrying out the strategic review process, Western Digital’s Board of Directors received financial advice from Qatalyst Partners, Lazard, and J.P. Morgan, and legal counsel from Skadden, Arps, Slate, Meagher & Flom LLP.
About Western Digital
With a mission to unlock the potential of data, Western Digital strives to harness the power of its use. Through its Flash and HDD franchises, and supported by advances in memory technologies, Western Digital creates pioneering innovations and powerful data storage solutions that enable the world to realize its aspirations. Committed to its core values, the company recognizes the urgency of combating climate change and has committed to ambitious carbon reduction targets approved by the Science Based Targets initiative.