Western Digital, the hard-drive maker has acquired SanDisk, the flash card company for a huge amount of $19 billion. Earlier the acquisition was speculated to be worth less than $16 billion.
The acquisition deal values SanDisk at $86.50 per share which is 15% more than the Tuesday’s close. Some days back this month, SanDisk’s shares were traded for less than $60 per share before the talks on acquisition started. According to the deal, Western Digital pays $85.10 per share in cash and 0. 0176 of Western Digital common stock per share of SanDisk common stock. Further to the acquisition, Steve Milligan, CEO of Western Digital will continue to serve the same position for the combined company, and it is expected than Sanjay Mehrotra, CEO of SanDisk would soon join the board of directors.
The companies said that the acquisition aim to bring wider set of products for consumers and dat centers with their complementary product lines that includes hard disk drives, solid state drives, cloud data center and flash storage solutions. It also targets to grow Western Digital’s market globally and also to get long-term access to solid state technology at a lesser price.
In a statement, Steve Milligan said, “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.”
Mehrotra added, “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.”
Currently, SanDisk is one of the biggest supplier of solid state drives and NAND flash memory, which Western Digital will combine with its own business. SanDisk has teamed up with Toshiba for its NAND flash memory on a 15-year partnership and the company promises that this acquisition will not affect it. Western Digital is dominant in spinning disk hard drives which are still the go-to for large qualities of files.