By Arathy S Nair
(Reuters) - Western Digital Corp (O:WDC) said China's Unisplendour Corp Ltd <000938.SZ> backed out from buying a stake in the hard-disk maker, forcing the U.S. company to cut the price of its proposed offer for rival SanDisk Corp (O:SNDK) by 9 percent.
Unisplendour, a unit of China's state-backed Tsinghua Holdings Co Ltd, had said in September it would buy a 15 percent stake in Western Digital for $3.78 billion.
The Chinese company scrapped its investment plan after a decision by the Committee on Foreign Investment in the United States (CFIUS) to investigate the deal, Western Digital said.
Western Digital shares were down 7.4 percent in premarket trading. Shares of SanDisk, which the latest offer values at $15.78 billion, were down 3.2 percent.
SanDisk did not immediately reply to requests for comment.
Western Digital affirmed its commitment to buy SanDisk Corp (O:SNDK) on Tuesday, the day after shareholder Alken Asset Management asked the company to drop the deal, saying the price was too high.
Western Digital, which reached a deal to buy SanDisk for $19 billion in October, had said then it would revise the cash-and-stock offer if the Unisplendour investment fell through.
Based on Western Digital's Monday close, the company said it would now pay $78.50 per share in cash and stock for SanDisk, compared with its previous offer of $86.50.
Western Digital said it has received regulatory approvals for the SanDisk deal from the United States and European Union among others.
CFIUS, an inter-agency panel led by the Treasury Department, assesses potential mergers to ensure they do not endanger national security. The agency's objections have created roadblocks for some Chinese deals.
Fairchild Semiconductor (O:FCS) rejected an offer from China Resources Microelectronics Ltd [CHRMI.UL] and Hua Capital Management Co Ltd this month, citing concerns about U.S. approvals.