Western Digital Agrees To Acquire SanDisk In $19 Bln Cash, Stock Deal

(RTTNews) - Western Digital Corp. (WDC) and SanDisk Corp. (SNDK) said they have entered into a definitive agreement for Western Digital to acquire all outstanding shares of SanDisk in a cash and stock deal with a total equity value of $19 billion.

The offer values SanDisk common stock at $86.50 per share, using a five-day volume weighted average price ending on October 20, of $79.60 per share of Western Digital common stock. The transaction has been approved by the boards of directors of both companies.

If the previously announced investment in Western Digital by Unisplendour Corporation Limited closes prior to this acquisition, Western Digital will pay $85.10 per share in cash and 0.0176 shares of Western Digital common stock per share of SanDisk common stock.

If the Unisplendour transaction has not closed or has been terminated, Western Digital will pay $67.50 in cash and 0.2387 shares of Western Digital common stock per share of SanDisk common stock.

Western Digital said the combination is the next step in the transformation of the company into a storage solutions company with global scale, extensive product and technology assets, and deep expertise in non-volatile memory.

With this transaction, Western Digital will double its market and expand its participation in higher-growth segments. The combination also enables Western Digital to vertically integrate into NAND.

Steve Milligan, chief executive officer of Western Digital, will continue to serve as chief executive officer of the combined company. The firm will remain headquartered in Irvine, California.

Upon closing, Sanjay Mehrotra, president and chief executive officer of SanDisk, is expected to join the Western Digital Board of Directors.

Separately, Western Digital reported first-quarter net income of $283 million, or $1.21 per share on revenue of $3.4 billion. On a non-GAAP basis, net income was $366 million, or $1.56 per share.

On average, 24 analysts polled by Thomson Reuters expected earnings of $1.56 per share for the quarter. Analysts' estimates typically exclude special items. Analysts expected revenues of $3.28 billion.