Irvine, CA—Western Digital Corporation, developer and manufacturer of storage solutions that enable people to create, manage, experience and preserve digital content, and SanDisk Corporation, a global leader in flash storage solutions, entered into a definitive agreement under which Western Digital will acquire all of the outstanding shares of SanDisk for a combination of cash and stock.
The goal of the transaction is to transform Western Digital into a storage solutions company with global scale, extensive product and technology assets, and deep expertise in nonvolatile memory (NVM). Once the deal is completed, Western Digital will double its addressable market and expand its participation in higher growth segments.
“This transformational acquisition aligns with our long-term strategy to be an innovative leader in the storage industry by providing compelling, high-quality products with leading technology,” said Steve Milligan, CEO, Western Digital. “The combined company will be ideally positioned to capture the growth opportunities created by the rapidly evolving storage industry. I’m excited to welcome the SanDisk team as we look to create additional value for all of our stakeholders, including our customers, shareholders and employees.”
SanDisk brings a 27-year history of innovation and expertise in NVM, systems solutions and manufacturing. The combination also enables Western Digital to vertically integrate into NAND, securing long-term access to solid state technology at lower cost. Western Digital brings a successful track record of M&A with a number of acquisitions over the last several years helping to fuel innovation, create value and position the company to capture higher growth opportunities.
“Western Digital is globally recognized as a leading provider of storage solutions and has a 45-year legacy of developing and manufacturing cutting-edge solutions, making the company the ideal strategic partner for SanDisk,” said Sanjay Mehrotra, president and CEO, SanDisk. “Importantly, this combination also creates an even stronger partner for our customers. 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.”
The two companies complementary product lines, including hard disk drives, solid-state drives, cloud datacenter storage solutions and flash storage solutions, will provide the foundation for a broader set of products and technologies from consumer to datacenter. Both companies have strong R&D and engineering capabilities and a base of fundamental technologies with more than 15,000 combined patents issued or pending.
SanDisk’s long-term strategic partnership and joint venture (JV) with Toshiba will be ongoing, enabling vertical integration through a technology partnership driven by deep collaboration across design and process capabilities. The JV provides a stable NAND supply at scale and extends across NVM technologies such as 3D NAND.
Steve Milligan will serve as chief executive officer of the combined company, and the company will remain headquartered in Irvine, California. Upon closing, Sanjay Mehrotra is expected to join Western Digital’s board of directors.
The offer values SanDisk common stock at $86.50 per share or a total equity value of approximately $19 billion. If the previously announced investment in Western Digital by Unisplendour Corporation Limited closes prior to this acquisition, Western Digital will pay $85.10 per share in cash and 0.0176 shares of Western Digital common stock per share of SanDisk common stock. If the Unisplendour transaction has not closed, those figures are $67.50 in cash and 0.2387 shares of Western Digital common stock per share of SanDisk common stock.
The transaction is subject to approval by SanDisk shareholders and, in the event that the Unisplendour transaction does not close, Western Digital shareholders, receipt of regulatory approvals and other customary closing conditions. The transaction is expected to close in the third calendar quarter of 2016. wdc.com