We heard rumours last week that SanDisk is looking to sell its business and had already hired a bank to look out for potential buyers. Now, we have received a confirmation that Western Digital is indeed acquiring the SSD company for a colossal US$19 billion.
Western Digital will acquire all of the outstanding shares of SanDisk for a combination of cash and stock. Quoting the expansion of addressable market as its reason for the acquisition, Western Digital will also own SanDisk’s 27-year worth of innovation and expertise in non-volatile memory (NVM).
The combination would allow Western Digital to minimise its dependence on spinning hard drives with the addition of flash memory chip technology. It will also facilitate the vertical integration into NAND for the hard drive maker and thus secure long-term access to solid state technology at lower cost.
Western Digital has had a successful track record of M&A with a number of acquisitions over the last several years.
Together, the companies will be better equipped to prepare for the future of storage technology. As we have discussed before, it is getting more difficult for companies like SanDisk and Western Digital to compete with giants like Samsung, whose flash memory can be found in countless PCs and mobile devices.
As Sanjay Mehrotra, President and CEO of SanDisk says, “Western Digital is globally recognised 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.”
Their products complement each other such as hard disk drives, solid-state drives, cloud datacenter storage solutions and flash storage solutions. Both companies also have strong R&D and engineering capabilities with over 15,000 combined patents issued or pending worldwide.
Steve Milligan will continue as CEO of the combined company and its HQ will remain in Irvine, California. Upon closing, Mehrotra is expected to join the Western Digital Board of Directors.
