Kioxia and Western Digital
No Merger after all
The merger agreement was supposed to be ready for signing by the end of October. Because SK Hynix rejected the merger, Western Digital is now withdrawing from the negotiations.
SK Hynix had taken a stake in Toshiba Memory, now Kioxia, when a consortium led by Bain Capital took over the company; the shares are currently worth 2.7 billion dollars. Moreover, Kioxia and Western Digital had not been able to agree with Bain Capital on the terms of the merger.
Kioxia and Western Digital have suffered greatly from the price collapse in the storage market and need capital. The merger would have put the new company on a par with market leader Samsung in terms of sales and, it is hoped, would have led to higher profitability and better growth prospects due to its size.
In Japan, Kioxia and Western Digital work closely together in the development and production of NAND flash ICs. For many years, Kioxia had already operated a joint venture with SanDisk, which Western Digital bought in 2016 for almost 16 billion dollars. With this, the hard disk manufacturer wanted to penetrate the market for NAND flash memory. In 2018, Toshiba had separated from the memory business. In the course of the separation, disputes had initially arisen between Toshiba and Western Digital, which wanted to take over the Toshiba division. After Western Digital had acquired SanDisk, the management assumed that it would have a significant say in the sale of the division. In the end, however, a consortium led by Bain Capital acquired the memory division (Toshiba Memory Corp) for 18 billion dollars.
