Merger negotiations between Western Digital and Kioxia have reached their final stages. The Nikkei and The Japan Times wrote this based on informed sources. The companies want to reach an agreement this month.
Discussions are currently underway with financial institutions to finalize the investments. Nikki writes. Major Japanese banks may be willing to provide loans worth between 10 and 12 billion euros. According to the Japan Times Shareholders of the American company Western Digital will own just over fifty percent of the company, while shareholders of the Japanese company Kioxia will own 49.9 percent.
However, there are still some challenges that complicate the completion of the merger, Nikkei said. For example, South Korean chipmaker SK Hynix, an indirect shareholder of Kioxia, is said to oppose the deal, and there is also a high possibility that China’s antitrust authorities will not approve the merger. He fears that due to US export restrictions on semiconductor technology, it will become difficult for Kioxia to supply Chinese customers after the merger.
The goal is to merge Western Digital’s nand division with Kioxia. This would make the two companies the largest NAND memory manufacturers in the world. Their market share stands at 35.4 percent, while the current leader, Samsung, currently holds a 34.3 percent share. The new company should be listed on the US technology exchange Nasdaq, says the Japan Times.
There have been rumors for some time that Western Digital might want to acquire Kioxia, the former Toshiba Memory company. WD wants to finance the merger with shares worth $20 billion, equivalent to about 19 billion euros. On the other hand, shortly after the initial reports in 2021, negotiations were said to have stalled, partly due to disagreements over the valuation of the companies involved. Negotiations reportedly resumed in early January. The manufacturers have been working together as a joint venture to produce NAND memory for decades. In 2017, the existing partnership between the two companies was extended until 2029.
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