Western Digital and Unisplendour create Chinese datacentre storage joint venture

By the second quarter of next year, a new business will be selling Western Digital storage arrays in China, pending regulatory approval.

Western Digital and Tsinghua University-owned Unisplendour have extended their relationship and announced the creation of a joint venture company to sell Western Digital datacentre storage arrays in China.

The unnamed business will be 51 percent owned by Unisplendour and its Unissoft subsidiary, with Western Digital holding the remaining 49 percent stake.

"With [Unisplendour's] experience, together we can offer a portfolio of storage solutions that is tailored to the needs of China-based customers," said Western Digital chief executive officer Steve Milligan in a statement. "We also look forward to maintaining strong relationships with our existing partners in China."

The joint venture has gained the approval of the boards of each company, and is scheduled to begin operations in the second quarter of next year, pending regulatory approval.

The deal follows Unisplendour's recent decision to purchase a 15 percent stake of the US storage giant for $3.775 billion.

As part of the purchase, Unisplendour gained a seat on Western Digital's board and agreed to a five-year lock-up on its shares, with a limited number of shares becoming available for transfer each year, and the sale proceeds from the investment to be injected into strengthening Western Digital's balance sheet.

In May, Unisplendour teamed up with HP to form a new business called H3C to sell HP's China-based server, storage, and technology services businesses. Under the terms of the agreement, Unisplendour acquired a 51 percent share of H3C for $2.3 billion, with HP bringing its H3C Technologies subsidiary and HP China businesses to the table.

Last month, Western Digital announced its intention to purchase fellow storage supplier SanDisk for approximately $19 billion. The transaction is expected to close in the third quarter of 2016.