Samsung withdraws offer for Sandisk

Samsung waives an acquisition of Sandisk. Sandisk’s disappointing third-quarter results and a hasty deal between Sandisk and joint venture partner Toshiba are said to be the reasons for this decision.

Sandisk, the California maker of flash products, suffered an operating loss of $250 million in its third fiscal quarter ended September 28, compared to a profit of $109 million in the same quarter a year earlier. Turnover fell by 21 percent to $821 million. In addition, the company announced at the presentation of its quarterly results that it would cut jobs. Also on that occasion, Sandisk announced that it had sold part of its flash production capacity to its joint venture partner Toshiba. That sale would be about a billion dollars. As a result of these developments, which are seen as risk-increasing by Samsung, Samsung decided refrain from taking over Sandisk.

Samsung CEO Yoon Woo Lee also said there is “growing uncertainty” about Sandisk’s prospects, which could only worsen with the difficult economic conditions. standing like this according to Peter Yu, analyst at BNP Paribas, prices of nand-flash products are under pressure due to the large supply. Partly because of this, Sandisk saw the value of its shares halve this year.

Sandisk was an interesting acquisition candidate for Samsung, because the Koreans annually pay $250 million in licensing fees to Sandisk for the use of flash patents. Sandisk also holds patents in the field of 3D memory and other technologies that may be of interest in the future.