IRVINE, Calif., Oct. 21 (UPI) — Data storage giant Western Digital announced Wednesday it will purchase flash storage manufacturer Sandisk for $19 billion.
Western Digital will pay for the acquisition in cash and stock. SanDisk will be valued at $86.50 a share, a 15 percent jump over Tuesday’s closing price.
The merger will allow Western Digital to add SanDisk’s faster flash products to its line of slower hard disk-based storage media. It plans to enter a debt of $18.4 billion, including $1 billion of revolving credit, for the purchase.
Despite both companies’ track record of success, an industry shift toward flash memory has led to decreased sales for Western Digital’s hard disk-based offerings. SanDisk, however, has also lagged behind expectations.
SanDisk CEO Sanjay Mehrotra will join Western Digital’s board of directors once the deal closes. Western Digital will remain at is headquarters in Irvine, Calif.
The company says the merger is “the next step” toward the company’s globalization and knowledge in non-volatile memory. It also said the acquisition will help it develop solid state technology, which promotes faster data access speeds with reduced power consumption, at a lower cost.
Western Digital CEO Steve Milligan said the “acquisition aligns with our long-term strategy to be an innovative leader in the storage industry.”
Toshiba will also begin working with Western Digital, after having been a partner with SanDisk for 15 years.
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