Western Digital Buying SanDisk for $19 Billion
Western Digital Corp. is acquiring SanDisk Corp. in a storage hardware megadeal worth $19 billion.
The companies entered into a definitive agreement, announced Wednesday, involving cash, new debt financing and Western Digital stock. The boards of directors for both companies have approved the deal, which is expected to close in the third calendar quarter of 2016. The deal still depends on SanDisk shareholder approval, and if a pending Unisplendor Corp. investment in Western Digital falls through, Western Digital shareholders will also have to give their blessing.
According to 45-year-old, Irvine, Calif.-based Western Digital, the acquisition will double its addressable market and improve its position in higher-growth segments. The companies listed their complementary product lines as hard disk drives, solid-state drives, cloud datacenter storage solutions and flash storage solutions.
"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, chief executive officer of Western Digital, in a statement. "The combined company will be ideally positioned to capture the growth opportunities created by the rapidly evolving storage industry."
Milligan will be CEO of the combined company, with headquarters remaining in Irvine. SanDisk President and CEO Sanjay Mehrotra is expected to join the Western Digital board of directors when the deal closes. A long-term strategic partnership between Toshiba and SanDisk will continue, the companies said.
After closing the deal, Western Digital expects to find $500 million in synergies within 18 months and to be earnings per share accretive (non-GAAP) within a year.
Posted by Scott Bekker on October 21, 2015 at 9:43 AM