Western Digital Will Buy SanDisk For $19 Billion

Western Digital Logo AH

It was hard to imagine how SanDisk, which builds removable storage for many devices including smartphones in the shape of Micro SD cards, could be having financial issues. Last week, we reported that this company was looking for a buyer. By that time, Western Digital and Micron Technology were apparently interested in acquiring SanDisk, but that couldn’t be confirmed. A few days ago, it was reported that Samsung could be interested in buying SanDisk as well. Now, Western Digital has officially communicated that they would buy SanDisk for $19 billion in cash and stock, in order to lower the costs to access their flash storage solutions.

Since Western Digital builds traditional storage solutions like spinning magnetic hard drives, they could be looking at some of the technology from SanDisk to expand their product portfolio. NAND flash technology is found on USB flash drives, memory cards and MP3 Players, all of which are products that SanDisk has developed, and that kind of technology could be used in building solid-state drives (SSD) that are used in some laptops, data centers, cloud computing and it could be used in some mobile products. Actually, both companies have collaborated in 2013 by creating a hybrid drive that combined a hard disk with a solid-state drive. SanDisk currently uses some foundries from Toshiba to make their chips, this could have been an issue, as they needed an approval from the Japanese company to complete this transaction. Toshiba also has some intellectual property from this joint venture, but SanDisk and Western Digital have stated that the joint venture with Toshiba will continue, which will surely benefit Western Digital.

“This transformational acquisition aligns with our long-term strategy to be an innovative leader in the storage industry by providing compelling, high-quality products with leading technology,” said Steve Milligan, chief executive officer, Western Digital. Both companies have over 15,000 patents issued or pending worldwide, so this could lead to research for new innovative products. Steve Milligan, Western Digital’s current CEO will be the new CEO for the combined company while SanDisk’s CEO Sanjay Mehrotra is expected to join the Western Digital Board of Directors.