NEW YORK (TheStreet) -- Western Digital Corp. (WDC) - Get Report stock is falling 4.45% to $44.05 in mid-morning trading on Tuesday after Unisplendour Corp. terminated plans to invest $3.78 billion in the hard-disk drive maker.

The Chinese firm, which would have acquired a 15% stake in Western Digital, pulled the offer after the Committee on Foreign Investment in the U.S. decided to investigate the proposal, Western Digital said in a statement.

Unisplendour's decision alters Western Digital's plans to acquire flash storage maker SanDisk Corp. (SNDK) by lowering the value of the offer.

Western Digital is now offering SanDisk shareholders $67.50 in cash and 0.2387 shares of Western Digital per share.

The alternative offer is valued at $78.50 per share based on Western Digital's stock closing price on Monday, compared with the previous proposal of $86.50 per share, according to Reuters.

Shares of SanDisk are down 1.71% to $66.52 this morning.

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Separately, Western Digital has a "hold" rating and a letter grade of C at TheStreet Ratings because of the company's strengths, such as largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations, and its weaknesses, including generally disappointing stock performance, feeble earnings per share growth and deteriorating net income.

You can view the full analysis from the report here: WDC

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

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