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Western Digital Loses China Investor Over Security Review

  • U.S. review cited as Unisplendour calls off $4 billion plan
  • Storage maker cuts SanDisk offer in pursuit of cloud market
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Western Digital Corp.’s plan to sell a 15 percent stake to a Chinese investor fell apart after the deal came under a U.S. national security review, highlighting the government’s ability to chill agreements that could give Chinese companies access to U.S. technology.

Without the investment from China’s Tsinghua Unisplendour Corp., Western Digital reverted to a lower offer for rival SanDisk Corp.under terms of the original agreement, but is still plugging ahead, showing its determination to gain market access and shave costs in the fast-growing markets for pocket devices and cloud computing.