Kioxia and Western Digital accelerate talks to merge flash memory

Kioxia and Western Digital accelerate talks to merge flash memory business

Rumors of Kioxia and Western Digital’s intentions to merge assets related to the release of solid-state storage first surfaced back in 2021, but then disagreements arose during negotiations over the valuation of the two parties’ business . Recovery this year as explained Reutersthese negotiations bring a potential deal closer to create a serious competitor for Samsung Electronics.

    Image source: Kioxia

Image source: Kioxia

If the aforementioned South Korean company is the leader in the global flash memory market, then Kioxia takes second place and Western Digital settles for fourth. By combining their assets, the latter two companies could claim a third of the global market, which is already comparable to the size of Samsung’s business. Now the solid-state storage market is in decline, and the consolidation could be a salvation for Kioxia, which has been building its business on the foundation of Toshiba Corporation since 2018.

According to sources, the parties are currently working on a deal that would create a joint venture in which 43% of the capital owned by Kioxia and 37% of the shares would be inherited by Western Digital Corporation. The remaining shares would be divided among the remaining shareholders of both companies. The agreement would inevitably draw the attention of antitrust authorities in many countries, including the United States and China, and therefore bureaucratic obstacles to implementation could arise.

It’s not entirely clear how Toshiba’s interests could be factored into the structure of this deal, given that the company still owns a 40.6% stake in Kioxia while also going through a privatization itself, selling its assets for $15 Billions to a consortium of Japanese investors. What would happen to Toshiba’s stake in Kioxia’s capital in this case is not explained. Representatives of the listed companies did not comment on the rumors about the preparation of a deal between Kioxia and Western Digital.

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Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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