Western Digital buys Sandisk

Western Digital buys Sandisk

The other day, gossip about the possible merger of two giants in their areas: one of the largest manufacturers of Western Digital hard drives and no less popular manufacturer of Sandisk Flash drives. It was said that negotiations are already at the final stage. Now Western Digital has officially announced that Sandisk is buying. The total transaction amount is $ 86.50 per share. It seems that WD plans to enter the market of flash drives and SSD.

There were rumors that Micron also showed interest in Sandisk, but it seems that these were only rumors, or the Western Digital proposal was more interesting. It is interesting that Sandisk is tightly cooperating with a competitor of WD on a hard drive, Toshiba, but it seems that the deal will not affect their joint production in any way. Such transactions are not made instantly and this is planned to be completed by the third quarter of next year.

Irvine, Calif. And Milpitas, Calif. — Oct. 21, 2015 — Western Digital® Corporation (NASDAQ: WDC) and SanDisk Corporation (NASDAQ: SNDK) today announced that they have entered into a definitive agreement under which Western Digital will acquire all of the outstanding shares of SanDisk for a combination of cash and stock. The Offer Values ​​Sandisk Common Stock at $ 86.50 Per Share Or A Total Equity Value of Approximatly $ 19 Billion, USING A Five-Day VOLUME WEIGHTED AVEAGE Price Ending On October 20, 2015 of $ 79.60 Per Share of Western Digital Common Stock. IF the Previously Announced Investment in Western BY Unispolendour Corporation Limited Closes Prior to This Acquisition, Western Digital Will Pay $ 85.10 Per Share in Cash and 0.0176 Shares of Western Digital Common Stock Per Share of Sandisk Common Stock; and if the unisplandour Transaction Has not Closed or Has Been Terminated, $ 67.50 in cash and 0.2387 Shares of Western Digital Common Stock Per Share of Sandisk Common Stock. The Transaction Has Been Approved by the Boars of Directors of Both Companies.

The combination is the next step in the transformation of Western Digital into a storage solutions company with global scale, extensive product and technology assets, and deep expertise in non-volatile memory (NVM). With this Transaction, Western Digital Will Double Its Addressable Market and Expand Its Particupation in Higher-Growth Segments. Sandisk Brings A 27-Year History of Innovation and Expertise in NVM, Systems Solutions and Manoufacturing. The Combination Also Enables Western Digital to Vertically Integrate Into Nand, Security Long-Term Access to Solid State Technology at Lower Cost.

The Proposed Combination Creates Significant Value for Both Sandisk and Western Digital Shareholders. Western Digital Brings a Successful Track Record of M&A with a number of acquisitions over the Last Several Years Helping to Fuel Innovation, Create Value and Strongly Position The Company to Capture Higher-Grown Opportunitities. In addition, Western Digital’s operational excellence, coupled with the recently announced decision by China’s Ministry of Commerce (MOFCOM) allowing Western Digital to integrate substantial portions of its WD and HGST businesses, is expected to generate additional cost synergies.

“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. “The Compined Company Will Be Ideally Positioned to Capture The Growth Opportinites Created by the Rapidly Evolving Storagege Industry. I’M Excited to WelCome the Sandisk Team as We Look to Create Additional for All of Oour StakeHolders, Including Oour Customers, Sharreholders and Employees.”

“Western Digital is globally recognized as a leading provider of storage solutions and has a 45-year legacy of developing and manufacturing cutting-edge solutions, making the company the ideal strategic partner for SanDisk,” said Sanjay Mehrotra, president and chief executive officer, Sandisk. “Importantly, This Combination Also Creates An Even Stronger Partner for OUR Customers. Joining Forces with Western Digital Will Enable The Combined Company to Offer the Broadstfolio of Industry-Lady, Innovative Solutions to Customers Across apross apross apross apross apross apross apres.”

Western Digital and SanDisk’s complementary product lines, including hard disk drives (“HDDs”), solid-state drives (“SSDs”), cloud datacenter storage solutions and flash storage solutions, will provide the foundation for a broader set of products and technologies from Consumer to Datacenter. Both Companies have Strong R&D and Engineering Capabilites and A Rich Base of Fundamental Technologies with 15,000 Combined Patents IsSood or Pending Worldwide.

TOSHIBA HAS Been A Long-Term Strategic Partner to Sandisk for 15 Years. The Joint Venture (JV) with Toshiba Will BE Ongoing, Enabling Vertical Integration Through A Technology Partnership Driven by Deep Collaboration Across Design and Proecess Capabilites. The JV Provides Stable Nand Supply at Scale Through A Time-Tested Business Model and Extends Across NVM Technologies Such As 3D Nand Nand Nand.

Steve Milligan Will Continue to SERVE as Chief Executive Officer of the Compined Company, and the Company Will Remain Headquartered in Irvine, California. Upon Closing, Sanjay Mehrotra Is Expicted to Join the Western Digital Board of Directors.

LED by ASONED Management Team, Western Digital Has a Strong Track Record of Integrations to Create Value. The Company Expects to Achieva Full annual Run-Rate Synergies of $ 500 Million Within 18 Months Post-Closing. The Transaction is Expieded to Be Eps Accretive on a Non-Gaap Basis Within 12 Months of the Transaction Close. Pending the Closing of the Transaction, Western Digital Expects to Continue Paying Its Quarterly Dividend and Plans to Suspend Its Share Buyback Program.

The Transaction Will Be Finance by A Mix of Cash, New Debt Financing and Western Digital Stock. In Connection with the Transaction, Western Digital Expects to Enter Inter Into Debt Facilits Totaling $ 18.4 Billion, Including a $ 1.0 Billion Revoling Credit Facility. The Proceds from the New Debt Facilities Are Expected to Be Used to Pay Part of the Purchase Price, Refinance Existing Debt of Western Digital and Sandisk and Pay Transaction Fexation Andes. IF Sandisk Cash Balance Falls Below Certain Thresholds at the Time of Transaction Close, The Merger Agreements for an Adjustment to the Mix of Cash and Stock Consideration.

The transaction is subject to approval by SanDisk shareholders and, in the event that the Unisplendor transaction does not close, Western Digital shareholders, receipt of regulatory approvals and other customary closing conditions. The Transaction is Expected to Close in the Third Calendar Quarter of 2016.

Bofa Merrill Lynch and J.P. Morgan ARE Acting As Lead Financial Advisors to Western Digital and Will Provide Committed Financing for the Transaction. ALSO, Credit Suisse is Acting AS A Financial Advisor and Providing Committed Financing, And RBC Capital Markets Providing Committed Financing. Cleary Gottlieb Steen & Hamilton LLP and Baker & Mckenzie Are Acting As Legal Advisors to Western Digital.

Goldman Sachs IS Acting as the Exclusive Financial Advisor to Sandisk. Skadden, Arps, Slate, Meagher & Flom LLP IS Acting as the Exclusive Legal Advisor to Sandisk.

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