Western Digital to buy SanDisk for $19 billion
In a deal that underscores the dramatic shift from desktops to thin laptops and handheld devices, hard drive maker Western Digital Corp. said last Wednesday it will acquire flash memory manufacturer SanDisk Corp. in a cash and stock deal worth about $19 billion.
Under the deal, Western Digital, based outside Los Angeles, in Irvine, picks up one of the leading manufacturers of the small memory chips crucial for smartphones, tablets, ultra-thin laptops, and increasingly, the data centers that power cloud computing.
The combined company will be headquartered in Irvine and led by Western Digital Chief Executive Steve Milligan. After the deal closes, SanDisk Chief Executive Sanjay Mehrotra is expected to join the Western Digital board of directors.
Western Digital has about 76,500 employees and generated revenue of $14.6 billion in its fiscal year that ended July 3. SanDisk has over 8,000 employees and generated $6.6 billion in revenue last year.
While Western Digital produces a small number of those flash drives, also known as solid state drives or SSD, it has long focused its business on hard disk drives for a declining market in personal computers.
"Western Digital gets to diversify their business into solid state," said Angelo Zino, an equity analyst for S&P Capital IQ in New York.
SanDisk is credited with introducing the first flash drives more than two decades ago. Instead of reading data from a rotating hard disk, computers using far faster flash memory read it directly from a set of computer chips.