Western Digital Corp. reached a settlement with activist investor Elliott Management Corp. that calls for the $19 billion company to consider splitting into two.
The company said in a statement that it would consider strategic alternatives including a separation into businesses focused on traditional hard drives for computers and flash memory, respectively, confirming an earlier report by The Wall Street Journal.
Elliott in May revealed a 6% stake in Western Digital
WDC,
+1.00%
and sent a letter calling on the company to explore a breakup. San Jose, Calif.-based Western Digital, which has a market value of around $19 billion, previously said it would consider Elliott’s ideas.
At a conference in late May, Western Digital Chief Executive David Goeckeler said the company and Elliott had been discussing additional ways to improve the company’s valuation. Western Digital in 2020 decided to form separate units for its two businesses, a move Elliott praised and some saw as a precursor to a split.
Meanwhile, Japanese chip maker Kioxia Holdings Corp. is still open to a possible deal with Western Digital, according to people familiar with the matter.
An expanded version of this report appears on WSJ.com.
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