Until recently, it was assumed that the deal between Western Digital and Kioxia would be announced at the end of October, but the agency Nikkei Last night it was reported that negotiations on this issue had stopped. Reportedly, the main obstacle to completing the deal was resistance from SK hynix, which has been investing in Kioxia Capital since 2018.
According to the main source, the American corporation Western Digital informed Kioxia of its intention to terminate the negotiation process due to SK hynix’s resistance. We recall that yesterday the latter reiterated its willingness to protect the interests of shareholders and oppose the merger of Western Digital and Kioxia assets related to the production of solid-state memory. As previously mentioned, the companies also failed to reach an agreement with Kioxia’s main shareholder, investment company Bain Capital, which led the acquisition of Toshiba Memory Corporation’s assets in 2018.
At that time, SK hynix invested a total of $2.67 billion in Kioxia’s capital, part of which ($856 million) was issued for convertible bonds, the repayment of which would allow the Korean memory manufacturer to take control of a 15% stake. on the Japanese competitor. Kioxia now settles for fourth place in the solid-state storage market and SK Hynix in second place, but if the former were to partner with Western Digital, together they would even surpass Samsung Electronics, the market leader in this market segment. South Korean company SK hynix had its own plans to work with Kioxia, which could have been hindered by the deal with Western Digital. The failure of this deal will not prevent Western Digital and Kioxia from continuing to produce memory through a joint venture in Japan.