‘Western Digital and Kioxia want to reach deal on merger this month’

Merger negotiations between Western Digital and Kioxia are in the final stages. Nikkei and The Japan Times write this based on insiders. The companies would like to reach an agreement this month.

Discussions are currently ongoing with financial institutions to finalize the investments. writes Nikkei. Major Japanese banks may be willing to provide loans of between 10 and 12 billion euros. According to The Japan Times Shareholders of the American Western Digital will own just over fifty percent of the company, while shareholders of the Japanese Kioxia will receive 49.9 percent.

Nevertheless, there are still some challenges that complicate the completion of the merger, Nikkei said. For example, South Korean chip manufacturer SK Hynix, an indirect shareholder of Kioxia, is said to be opposing the deal, and there is also a significant chance that China’s antitrust authorities will not approve the merger. It is feared that, due to American export restrictions in the field of semiconductor technology, it will become more difficult for Kioxia to supply to Chinese customers after the merger.

The intention is for Western Digital’s nand division to be merged with Kioxia. This would jointly make the companies the largest NAND memory manufacturer in the world. They have a market share of 35.4 percent, while the current leader, Samsung, currently has a share of 34.3 percent. The new company should be listed on the American technology stock exchange Nasdaq, claims The Japan Times.

There have been rumors for some time that Western Digital may want to acquire Kioxia, the former Toshiba Memory. WD would like to finance the merger with shares worth 20 billion dollars, equivalent to around 19 billion euros. Shortly after the initial reporting in 2021, on the other hand, it was suggested that negotiations had come to a standstill, partly due to disagreements about the value assessment of the respective companies. Negotiations reportedly resumed in early January. The manufacturers have been working together as a joint venture for the production of nand memory for decades. In 2017, the existing partnership between the two companies was extended until 2029.