The merger plan of NAND flash memory chip manufacturer Kioxia and Western Digital (WD) is currently facing new variables. It was previously reported that South Korean memory giant SK Hynix initially claimed to be “opposed” “This merger”, later denied “objection”, but now the whole news has reversed.
“Given the impact on the value of our investment assets, we do not agree to the merger at this time,” SK Hynix Chief Financial Officer Kim Woo-hyun told analysts on a conference call on Thursday, according to the Financial Times. “But we will provide for all Decisions are made by stakeholders, including Kioxia and shareholders.”
▲Image source Financial Times
James Lim, an analyst at U.S. hedge fund Dalton Investments, said the reason why SK Hynix opposes the merger of Kioxia and Western Digital is that SK Hynix does not want to see a stronger competitor emerge. “The combined entity’s market share will be twice that of SK Hynix”.
Western Digital and Kioxia have been discussing a possible merger for years, and the companies are seeking to wrap up talks this month and hope to announce a deal before Western Digital reports earnings on Oct. 30. Kioxia had previously been in contact with Japan Investment Corp., hoping to inject capital to speed up the transaction process. However, SK Hynix has publicly expressed its opposition to the merger, so the overall plan is now facing new variables.
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