Tech firm backs out of US deal

Beijing-based tech company Unisplendour Corp Ltd has pulled out of a proposed $3.8 billion investment in the US disk drive maker Western Digital Corp because the Chinese firm deems the US government would not approve the deal.

Unisplendour, a subsidiary of State-owned conglomerate Tsinghua Holdings Co Ltd, said on Wednesday the decision was made after the Committee on Foreign Investment in the United States, a government organization that reviews foreign investments in US businesses, announced it will investigate the deal for security reasons.

The Chinese company had been attempting to purchase a 15 percent stake in Western Digital since September. The deal would have made Unisplendour Western Digital's largest shareholder and given it a board seat in the California-based company which sells hard drives to a long list of US government agencies.