Western Digital acquires SanDisk for $19 billion in cash and stock. The deal will help the disk drive maker to move into a faster-growing business that uses chips to store data. The deal values SanDisk at $86.50 a share, which is a 15% premium on the previous day’s closing price, giving the company a value of $15.4 billion.
The deal will greatly increase its ability to make flash memory storage chips used in smartphones and tablets.
“The combined company will be ideally positioned to capture the growth opportunities created by the rapidly evolving storage industry,” says Western Digital CEO Stephen D. Milligan.
“Joining forces with Western Digital will enable the combined company to offer the broadest portfolio of industry-leading, innovative storage solutions to customers across a wide range of markets and applications,” adds SanDisk CEO Sanjay Mehrotra.
Also, Western Digital’s move to buy SanDisk is the latest in a flurry of deals in the U.S. semiconductor industry, which has been hit by a supply glut and cheaper products from China that have driven down memory chip prices. Earlier on Wednesday, semiconductor equipment maker Lam Research acquired rival KLA-Tencor Corp in a deal valued at $10.6 billion.
Western Digital is among the largest hard drive makers in the world. The acquisition will result in making it a 3rd largest flash memory manufacturer and one of the biggest names in memory cards used by photographers.