Western Digital Buying SanDisk the Maker of Memory Chips
Under the deal’s terms, investors of SanDisk would receive $86.50 per share in cash and stock for every share owned, representing a premium of 15% to the closing price of SanDisk as of Tuesday.
This acquisition aligns with the long term strategy we have to be a leader of innovation in the storage industry by producing compelling products of high quality with leading edge technology, said CEO at Western Digital Stephen Milligan.
The new company is to be positioned ideally to capture the growth opportunities that are created by the rapidly evolving storage sector.
The acquisition is the most recent in a number of deals made this year as semiconductor suppliers as well as those of other components face more pressure on pricing from makers of electronic devices.
Semiconductor equipment maker Lam Research on Wednesday announced that it agreed to purchase KLA-Tencor in a deal of cash and stock worth over $10.6 billion.
That followed a Microsemi Corp offer to acquire PMC-Sierra a chipmaker on Monday in a deal for cash and stock that was said to be $2.4 billion.
Microsemi has sought to end the competing proposal from rival Skyworks Solutions a chipmaker who supplies Apple.
Intel the largest maker in the world of computer chips, NXP Semiconductors and Avago Technologies have made acquisitions in 2015 in the billions of dollars.
CEO Milligan of Western Digital said the combined company would be Irvine, California based.
SanDisk CEO and president Sanjay Mehrotra is expected to become a part of the board of directors at Western Digital following the closing of the deal.
The transaction will be subject to both regulatory and shareholder approval and should close by the 2016 third quarter.
Both of the boards of directors of the two companies approved the deal.