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Hard disk drive giant Western Digital has completed its acquisition of flash manufacturer SanDisk in a deal that will create a partnership that WD hopes will help it leap into the future of computer memory. The company announced plans to buy SanDisk last fall.
Western Digital’s reliance on spinning disk technology in a world that is swiftly moving towards solid state drives has been a cause for concern for the company that currently claims 44% market share for HDDs. Acquiring the world’s largest producer of NAND flash memory should settle some nerves.
Western Digital is said to be interested in cloud storage and computing solutions as PC sales continue to decline, so SanDisk’s know-how in flash data center technologies that provide more capacity in a smaller space, with less heat and faster communication have proven attractive.
All told, the deal cost Western Digital $ 17 billion in cash and shares, $ 2 billion short of initial estimates. The company expects to be able to make significant savings through economies of scale, expecting combined revenue of almost $ 20 billion with a better position to compete against Samsung and Micron.
For more information visit the SanDisk and Western Digital websites.
Press release:
WESTERN DIGITAL COMPLETES ACQUISITION OF SANDISK, CREATING A GLOBAL LEADER IN STORAGE TECHNOLOGY
Western Digital® Corporation (NASDAQ: WDC) today announced that its wholly-owned subsidiary Western Digital Technologies, Inc. has completed the acquisition of SanDisk Corporation (NASDAQ: SNDK). The addition of SanDisk makes Western Digital Corporation a comprehensive storage solutions provider with global reach, and an extensive product and technology platform that includes deep expertise in both rotating magnetic storage and non-volatile memory (NVM).
The Company also indicated that the debt financing associated with this transaction has been consummated and that the previously obtained funds from this financing have been released from escrow to Western Digital Technologies, Inc.
“Today is a significant day in the history of Western Digital,” said Steve Milligan, chief executive officer of Western Digital. “We are delighted to welcome SanDisk into the Western Digital family. This transformational combination creates a media-agnostic leader in storage technology with a robust portfolio of products and solutions that will address a wide range of applications in almost all of the world’s computing and mobile devices. We are excited to now begin focusing on the many opportunities before us, from leading innovation to bringing the best of what we can offer as a combined company to our customers. In addition, we will begin the work to fully realize the value of this combination through executing on our synergies, generating significant cash flow, as well as rapidly deleveraging our balance sheet, and creating significant long-term value for our shareholders.”
The integration process will begin immediately through the joint efforts of teams from both companies. As previously announced, Steve Milligan will continue to serve as chief executive officer of Western Digital, which will remain headquartered in Irvine, California. Sanjay Mehrotra, co-founder, president and chief executive officer of SanDisk, will serve as a member of the Western Digital Board of Directors, effective immediately.
“As a combined company, we will be best positioned to address the demands for data storage, which is growing exponentially every year,” said Sanjay Mehrotra. “Growth and change go hand in hand, and we couldn’t be happier to grow and change together with Western Digital. I look forward to contributing to realizing the potential of this combination as a member of the board.”
Under the terms of the transaction, each outstanding share of SanDisk common stock was converted into the right to receive $ 67.50 per share in cash and 0.2387 shares of Western Digital common stock.
SanDisk shareholders looking for information with regard to the payment of the merger consideration should review the Public FAQ available in the Investor Relations section of our website at investor.wdc.com or click here.
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