Western Digital recently announced the acquisition of SanDisk for a worth of $19 Billion. Western Digital will be acquiring all of the outstanding shares of SanDisk for a combination of cash and stock. The board of directors of the two companies have approved this acquisition.
In the press release, Western Digital wrote “The combination is the next step in the transformation of Western Digital into a storage solutions company with global scale, extensive product and technology assets, and deep expertise in non-volatile memory (NVM). With this transaction, Western Digital will double its addressable market and expand its participation in higher-growth segments.”
According to the deal, SanDisk share is priced at $86.50 which is a 15% premium on the last day’s closing price. There was a noticeable 4.78% increase in pre-market trading. Steve Milligan, chief executive officer, Western Digital 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”. Further he added “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 was founded in 1988 to innovate in NVM, systems solutions and manufacturing. Western Digital was started in 1970, and this acquisition will enable Western Digital to be able to secure solid state technology at a lower cost.
In the last few days, the share price of Western Digital fell from $85 to $75 (approximate figure). The acquisition indeed makes sense as both the companies are operating in the sector. Steve Milligan will remain the chief executive officer of the combined company and will have headquarter in Irvine, California. After the closure of the deal, Sanjay Mehrotra will join the Western Digital Board of Directors. This is the second biggest acquisition in the technology sector after the Dell bought EMC for an amazing $67 Billion. Facebook had acquired WhatsApp also for the worth of $19 Billion. An infographic is shown below that was published by Western Digital to give more information about the Acquisition