The value of SanDisk’s stock was closed at $76.78 per share, about five dollars more than Western Digital. The deal does not come as a complete shock - It has been speculated for about a week that this was bound to happen. This marks the next step for WD into providing storage solutions on a global scale, using both their products and those of SanDisk.
SanDisk specializes in flash memory storage devices such as USB flash drives and memory cards. SanDisk found themselves on hard times trying to survive on selling mostly flash drives and memory cards. With all the new ways to store data, people simply are not buying as many flash drives as they did five or ten years ago. With their powers combined, officials at Western Digital hope they will be able to respond to these constant changes in an effective way.
"The combined company will be ideally positioned to capture the growth opportunities created by the rapidly evolving storage industry,"
said Western Digital CEO Steve Milligan in a statement.
Some terms of the deal include a clause in which if SanDisk’s cash balance falls below certain thresholds at the time of transaction close, the merger agreement provides for an adjustment to the mix of cash and stock consideration.
The state of the current data storage market has led to numerous mergers and acquisitions recently, as the IT industry continues to look for ways to adapt to new trends. Just one week before, Dell completed the biggest storage market acquisition ever when they purchased EMC for $67 billion.
The deal is expected to be closed by the third quarter of next year.
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