Western Digital to buy flash storage maker Sandisk for US$19B

Storage solutions company, Western Digital on 21 October (Wednesday) announced that they have entered a definitive agreement to acquire all of SanDisk’s outstanding shares in a combination of cash and stock for about $19bn (£12.3bn, €16.8bn).

Under the deal’s terms, investors of SanDisk would receive $86.50 per share in cash and stock for every share owned, representing a premium of 15% to the closing price of SanDisk as of Tuesday.

The two companies said in a statement that Western Digital will double the market available to it, and that the combination will take it into higher growth segments in the memory storage market.

SanDisk manufactures chips using Toshiba’s foundries under an intellectual property-sharing joint venture. Much of the tech industry these days has seen a steady movement away from moving hard drives and a reliance on flash memory. Dell bought EMC recently for a record-breaking $67 billion.

Of course a deal of this magnitude isn’t going to be completed immediately. The vast experience of the firm in non-volatile memory (NVM) is expected to help Western Digital achieve its target of becoming a storage solutions company with a global scale and technologically advanced products. Sources suggested there were three names in hat: Western Digital, Micron, and China’s Tsinghua Unigroup, which is itself already a stakeholder in Western Digital. Milligan will remain the CEO of the combined companies, while SanDisk’s CEO Sanjay Mehrotra will be a member of WD’s Board of Directors.

Western Digital is paying the sum in a mixture of cash and stock, giving it access to SanDisk’s entire flash business.

The companies both offer complementary product lines, including hard disk drives, solid-state drives, cloud data center storage and flash storage solutions. Additionally, the acquisition will also enabled Western Digital to integrate into NAND, and secure a long-term plan to roll out solid state storage products at a much lower cost.

On average, 24 analysts polled by Thomson Reuters expected earnings of $1.56 per share for the quarter.