Western Digital To Acquire SanDisk for $19 Billion

Western Digital is making a big buy. The storage solutions company is laying out $19 billion to acquire flash storage pioneer SanDisk Corp. Western Digital is snapping up all outstanding shares of SanDisk for a combination of cash and stock. The deal values the stock at $86.50 per share. The boards of directors of both companies have approved the deal.

Steve Milligan [pictured], CEO of Western Digital, called the acquisition EUtransformational.EU The acquisition aligns with the companyEUs long-term strategy to drive innovation in the storage industry, he said in a statement. Milligan specifically stressed that the combined company will be EUpositioned to capture the growth opportunities created by the rapidly evolving storage industry."

Transformational Possibilities

Western Digital is positioning the acquisition as the next step in the companyEUs transformation into a storage solutions company with global scale, broad product and technology assets and non-volatile memory expertise. The transaction immediately doubles Western DigitalEUs addressable market and expands its competitiveness in higher-growth segments of the storage industry, the company said.

SanDisk brings plenty to Western Digital's transformation possibilities. The company has been plowing in the non-volatile memory storage, systems solutions and manufacturing field for 27 years. The combined company positions Western Digital to vertically integrate into NAND. Ultimately, the buy gives Western Digital long-term access to lower-cost solid state technology, which could serve as a competitive advantage.

We caught up with Rob Enderle, principal analyst at the Enderle Group, to get his thoughts on the big deal. He told us Western Digital and Seagate have been seeing a lot of sales pressure from flash drives -- and Western Digital has moved to address this by buying SanDisk. He said that makes him wonder whether Seagate missed a meeting.

Integration Issues

EUNow, mergers like this between companies from different periods seldom go well and there is a high...

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