Western Digital Buys Sandisk for $19 Billion

[Janus67]

http://www.tomsitpro.com/articles/w...-acquistion-tsinghua,1-2967.html#xtor=RSS-100

Western Digital announced it has purchased SanDisk for $19 billion. Western Digital will acquire all of the outstanding SanDisk shares in a combination of cash and stock.

He who holds the NAND stands to make the most profit, and WD's move solidifies its position in the flash-powered future. The HDD vendors have been struggling for the last several years as the PC market declines and SSDs continue to steal market share. Both Western Digital and Seagate have made significant investments in flash-based technology, with Western Digital scooping up STEC, Virident and Skyera. The only missing component was the ability to manufacture the NAND itself.

NAND fabs have been increasingly developing their lines of end-product SSDs, and vendors such as WD (which have to buy NAND from the fab), cannot match the fabs on pricing or profit margins. The acquisition couldn't possibly come at a better time for WD, which is purchasing SanDisk when its stock is undervalued. The possibility of a fab sale came to the forefront as SanDisk wildly unperformed over the last several quarters and its stock price plummeted.


Micron was recently approached by Chinese-government backed Tsinghua Unigroup with a buyout offer, but the deal was scuttled due to a likely bar of the transaction by the U.S. government due to national security concerns. Shortly thereafter, a subsidiary of the Tsinghua Unigroup (Unisplendour Corporation) purchased 15 percent of WD, which is more than twice the percentage of stock as the nearest shareholder.

This provided Unisplendour with a position on WD's board, but not a controlling interest in the company. Many speculated thereafter that Tsinghua Unigroup would attempt to purchase a fab through WD, thus avoiding the regulatory entanglements. That prediction appears to have come to fruition.

Western Digital will pay $85.10 per share in cash and 0.0176 shares of WD common stock per share of SanDisk common stock in the transaction. The pending Tsinghua Unigroup transaction with WD unsurprisingly comes into play. If the Unisplendour transaction has not closed or has been terminated, WD will pay only $67.50 in cash and 0.2387 of WD common stock.

SanDisk has a vast portfolio of flash-related technology as it acquired Schooner, FlashSoft, SMART memory systems, and Fusion-io recently. It also has its budding InfiniFlash offering, which will provide WD with a leading edge all-flash array. WD has been keen to expand into storage systems itself with the release of its Active Archive System, which focuses on cold data storage. The addition of a leading high-performance all-flash array, along with a vast portfolio of SSDs, ULLtraDIMMs, PCIe SSDs, and other products, will solve the flash puzzle nicely.

"This transformational acquisition aligns with our long-term strategy to be an innovative leader in the storage industry by providing compelling, high-quality products with leading technology," said Steve Milligan, chief executive officer, Western Digital. "The combined company will be ideally positioned to capture the growth opportunities created by the rapidly evolving storage industry. I'm excited to welcome the SanDisk team as we look to create additional value for all of our stakeholders, including our customers, shareholders and employees."

WD plans to achieve full run-rate synergies of $500 million within 18 months post-closing, which is slated for the third quarter of 2016.

WD emerges as a fully-rounded flash player, in addition to its complete line of HDD offerings. The company also recently received the long-overdue MOFCOM approval for its HGST acquisition, so the company is on an incredible winning streak. WD has been aligning all of its flash-based acquisitions under the HGST hierarchy, so expect SanDisk to also be placed under HGST temporarily until the two-year MOFCOM restrictions automatically expire.

The big question is how Seagate will respond, and with its current strategic alliance with Micron on the table, and disconcerting developments in the Intel/Micron IMFT relationship, it is possible it will also look to make an acquisition in the coming months.

 

[sobe]

Saw this on Engadget earlier, and yea, if they pick up SanDisk they will be part of one of the top SSD companies out there. For the high-end, the ExtremePro is one of the best sata drives on the market, if not THE best, offering better sustained than even the 850 Pro (I have both, and the ExtremePro blows the 850 Pro out of the water when encoding video in Sony Vegas and similar tasks involving writing for longer than a few seconds).

I've heard good things about their lower end as well, but no first hand experience there.

 

[NZKshatriya]

Im using dual SSD Plus 120's, no issues here. They were inexpensive and are faster than anything I've ever had so win/win I'd say.
This buying of Sandisk must be to cover the news that WDs self-encrypting drives are full o holes lol.

 

[Woomack]

Smart move for WD as SSD profits are much higher than HDD, not to mention that WD is generally bad in SSD right now.
I just wish some fresh products as mentioned in this thread Extreme series SSD are good but were made on similar controllers/NAND as many other companies offer. Also performance is similar to many other products and it's easy to find replacement. However Sandisk has longer warranty than most other brands ( not as long as Samsung but still long ) and reasonable prices.
Their lower series SSD are popular mainly because of price but tbh most users can't see difference between slowest and these fastest SATA SSD on the market. They for sure see 30% difference in price

Interesting is that Chinese wanted to buy Micron. Micron made good move buying PSC/Elpida and couple of other brands. Elpida had the most advanced technology before they were bankrupt ( spent too much money on research ) and now it looks like Micron is on the top in research and future technologies but for some reason they are not releasing so many good ( read exceptional ) products. We only hear about them but can't really see.

Seagate is only losing and they have barely anything interesting lately what can convince users to back to their products. Looks like most of their sales are in deals with computer manufacturers. I can be wrong but I see that market is focused mainly on WD.

 

[sobe]

However Sandisk has longer warranty than most other brands ( not as long as Samsung but still long ).

Very happy with the SanDisk 10year warranty that Samsung also only offers on it's high-end

 

[Woomack]

Sandisk has 10 or 5 years only in the highest series ( depends from country etc ). All lower have 2-3 years. Samsung has 5 years in their lower - Evo series.
Still Sandisk highest series are cheaper than Samsung and you will probably replace it in 3-4 years anyway.