Western Digital Corp is in talks to merge with Japan’s Kioxia Holdings Corp in a deal that could unite two technology storage providers, a person familiar with the matter said.
A deal, which could be worth more than US$20 billion, might be reached by the middle of next month at the earliest if negotiations are successful, the person said, asking not be identified because the matter is private.
Talks could still fall apart and Kioxia, which is closely held, is still also pursuing an initial public offering (IPO), the person added.
Photo: Reuters
A spokesman for Kioxia said that the company is preparing for an IPO at the right time and declined to comment on “market rumors and speculation.”
A representative for Western Digital declined to comment.
Western Digital shares rose 7.8 percent in New York after the talks were reported by the Wall Street Journal, giving the company a market value of about US$20 billion.
Shares of Toshiba Corp, which spun off Kioxia in 2018 and remains a large shareholder, gained 2.1 percent in Tokyo trading.
A combination of the long-time joint venture partners would create a bigger competitor for Samsung Electronics Co in the market for memory chips used as storage in portable devices and computers.
Toshiba, the inventor of flash memory, sold a majority stake in Kioxia in 2018.
That type of chip is taking over for data storage from hard disk drives, Western Digital’s main product.
Kioxia and Western Digital had combined sales of about US$17 billion in flash memory chips last year, IDC Corp data showed.
Samsung had US$18.6 billion.
Industry sales jumped 37 percent last year.
Western Digital has provided Kioxia with funds for capital expenditure, and research and development in return for production out of its Japanese partner’s plants. The relationship has been fractious in the past, involving a bitter dispute when Western Digital, under a previous chief executive officer, tried to acquire Kioxia when Toshiba was experiencing financial difficulties as a result of its nuclear power division’s troubles.
Kioxia filed for an IPO last summer in which shareholders including Toshiba and Bain Capital were planning to sell shares.
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