Sandisk's new portable solid state drives are displayed at the Sandisk booth during the 2015 Computex exhibition at the TWTC Nangang exhibition hall in Taipei, Taiwan, June 2, 2015. PHOTO: REUTERS
Hard disk drive maker Western Digital Corp said it would buy memory chip maker SanDisk Corp for about $19 billion, the latest in a wave of consolidation in the chip-making industry.
The cash-and-stock offer values SanDisk at $86.50 per share, or a total equity value of about $19 billion, using a five-day volume weighted average price ending on Oct. 20 of $79.60 per share of Western Digital stock.
SanDisk's shares rose 6.4 per cent to $80 in pre-market trading. Western Digital's shares were down 1.1 per cent at $74.
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Demand for cheaper chips and new products to power Internet-connected gadgets, as well as a push from technology companies to consolidate suppliers, has led to record levels of deal making in the semiconductor sector this year.
The value of the SanDisk acquisition will depend on the closing and approval of an investment from a unit of China's state-backed Tsinghua Holdings Co Ltd, Unisplendour Corp Ltd in Western Digital, the companies said on Wednesday.
The deal is expected to close in the third calendar quarter of 2016.
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