October 23, 2015
Western Digital Corp, the largest maker of computer disk drives, is taking a walk down memory card lane with its announced plans to acquire memory-chip maker SanDisk Corporation. In doing so, it has also answered the question, “What can you buy for $19 billion?”
The cash and stock deal will unite the third largest supplier of memory devices for smartphones, tablets, and ultra thin laptops in the world with one of the largest providers of spinning disk and flash storage. The deal, which will join these two California based companies values San Disk stock at $86.50 per share. It is set to close in the third quarter of 2016, pending approval of SanDisk’s shareholders.
Western Digital CEO Stephen D. Milligan stated, “The combined company will be ideally positioned to capture the growth opportunities created by the rapidly evolving storage industry.
With the SanDisk perspective, president and CEO Sanjai Mehrotra added, “Joining forces with Western Digital will enable the combined company to offer the broadest portfolio of industry-leading, innovative storage solutions to customers across a wide range of markets and applications.”
Mehotra, who will join Western Digital’s board of directors also said, “Western Digital is globally recognized as a leading provider of storage solutions and has a 45-year legacy of developing and manufacturing cutting-edge solutions, making the company the ideal strategic partner for SanDisk.”
In 2014, SanDisk had revenues of approximately $6.6 billion, while Western Digital had revenues of $14.6 billion.
What does this mean for the consumer? That is the great unknown, though for the moment the acquisition isn’t expected to affect prices or selection. SanDisk is continuing to work with Toshiba, one of Western Digital’s competitors in the hard disk drive market. It is currently unknown what will happen to the brand name of SanDisk, the $19 billion baby.
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