Western Digital Corp. (WDC) has entered into an agreement to acquire SanDisk Corp. for approximately $19 billion in a deal that will net WDC access to a flash memory supply and expand the storage vendor’s solid state drive (SSD) offerings.
In second week of October, it was rumored that WDC and Micron were meeting with SanDisk for a possible deal, but it seemed as if WDC was the better fit given the needs of both companies. WDC says the combination of the two companies is the next step in its transformation into a storage solutions company with a deep product portfolio, global scale and strong experience in non-volatile memory.
With the deal, WDC will double its addressable market and expand its participation in higher-growth segments as well as to vertically integrate into NAND, securing long-term access to solid state technology at a lower cost, the company says. The transaction has already been approved by the board of directors of both companies.
Steve Milligan, CEO of WDC, says in a statement that the acquisition of SanDisk was a transformational acquisition that aligns well with the company’s long-term strategy in the storage industry and allows it to “be ideally positioned to capture the growth opportunities created by the rapidly evolving storage industry.”
The combination of the product lines will include hard disk drives (HDDs), SSDs, cloud data center storage solutions and flash storage solutions. It will also provide a foundation for a broader set of products and technologies from consumer to data center, WDC says.
The agreement will include the long-term agreement SanDisk has with Toshiba in a joint-venture that allows for a stable NAND supply and will extend to next-generation memory technologies such as 3D NAND.
WDC buying SanDisk is yet another mega-deal that has been happening in the semiconductor industry for more than a year including Dell buying EMC for $67 billion, Nokia buying Alcatel-Lucent for $17.3 billion, Intel’s acquisition of Altera for $16.7 billion, Avago’s $37 billion deal for Broadcom, NXP’s $11.8 billion buying of Freescale, the Cypress-Spansion deal for $4 billion and most recently the deal that saw Dialog Semiconductor make a grab for chipmaker Atmel for $4.6 billion.
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