The computer storage industry is about to undergo a massive change as Western Digital has announced a deal to acquire long time rival Sandisk. Western Digital is set to pay some US$19 billion for Sandisk, but the deal is still subject to regulatory approvals and a shareholder vote.
Western Digital is interested in expanding its capabilities in Non-volatile Memory. It will be using Sandisk’s assets to to boost its access to NAND, and the press release says that the deal will also help the company to acquire long term access to solid state technology for a lower cost. Sandisk’s long term joint venture with Toshiba is being maintained under the agreement, but it was not explained how it would work under the new corporate structure at Sandisk.
Neither Western Digital nor Sandisk has had a successful year. Sandisk’s revenue for the first three quarters of 2015 is down by 17-percent over the same time period last year; and Western Digital is not expected to fare much better when it announces its financial results next week. Western Digital’s share price dropped when news of the merger became publicly known, which indicates that not everyone is thrilled with the idea.
Western Digital is expecting the deal to be completed in the third quarter of 2016.
[Source: Western Digital, via Ars Technica]
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