Western Digital has just announced the acquisition of SanDisk. The combined cash and stock transaction is worth around $ 19 billion. This is a big move for Western Digital, as this storage giant has been largely left behind by the rush to solid-state storage, selling domestic hybrid products to consumers. In the future, Western Digital will be able to vertically integrate all products requiring NAND components.
In a statement announcing the acquisition, Western Digital said the deal represents “The next step in Western Digital’s transformation into a global storage solutions company, extensive product and technology assets, and deep expertise in non-volatile memory (NVM).” Perhaps more importantly, he continues, “With this transaction, Western Digital will double its addressable market and expand its stake in higher growth segments.”
SanDisk was an attractive target with its 27 year history and expertise in NVM, system solutions and manufacturing. With the expertise and integrated operations of SanDisk, Western Digital will be able to “Seize the growth opportunities created by the rapidly changing storage industry”, thinks its CEO, Steve Milligan. Indeed, the product lines of the two companies are expected to be complementary for some time as Western Digital hard drives still have utility value in some applications and it will be able to adapt smoothly thanks to strong R&D and engineering capabilities. of the two companies.
It should be noted that Sandisk has been a strategic partner of Toshiba for 15 years. Although Western Digital is a direct competitor of the Japanese firm, the press release regarding the acquisition indicates that “The Joint Venture (JV) with Toshiba will be continuous, enabling vertical integration through a technology partnership based on close collaboration between design and process capabilities. The JV provides stable NAND power at scale through a proven business model and extends to all NVM technologies. like 3D NAND. “
The deal, although agreed between the two parties, is still subject to shareholder and regulatory approval. If not hampered, Western Digital expects the deal to be finalized by the third quarter of next year and reassures shareholders that it has “a solid track record of integrating acquisitions to create value”.
Recently, we reported that the SSD market is expected to grow exponentially through 2022, so this could be a good move from Western Digital, with good timing. However, with the rise of competition from flash storage and limited demand, it was reported this summer that the price of SSDs was ” free fall “… So maybe the SanDisk sale was even more timely.