It is reported that Kioxia Holdings will reach a merger agreement with Western Digital as soon as this month. If the two parties merge, their semiconductor memory business will become the largest in the world.
Western Digital acquired solid-state storage manufacturer SanDisk for $19 billion in 2016 and also gained control of its joint venture with Kioxia (formerly Toshiba). Western Digital is currently preparing for a new stage of transformation and plans to sell its storage business to Kioxia.
According to the Nikkei Asian Review, after careful negotiations between the two companies, a new holding company will be established after the merger. After exchanging the number of shares required by the new company, Western Digital will retain 50.1% of the assets and the remaining 49.9% will belong to All owned by Kioxia.
The president of Kioxia will manage the business, and the Japanese representative company will occupy the majority of the board seats. The new company will be registered in the United States but will be headquartered in Japan, and its shares will be listed on the U.S. and Tokyo stock exchanges.
Western Digital and Kioxia combined controlled 32% of the flash memory market last year, trailing only leader Samsung Electronics’ 34%.
According to British research company Omdia, if merged, the global market share based on value in the NAND field would be 35.4% as of the end of March this year, surpassing South Korea’s Samsung Electronics (34.3%) to rank first in the world.
Negotiations are ongoing with potential creditors including Japan’s major banks who could provide $10 billion to $12.7 billion in funding.
In order to promote the merger, the three major banks including Mitsubishi UFJ Bank and the Japan Policy and Investment Bank are considering providing approximately 1.9 trillion yen in funds, which are planned to be issued as soon as the 20th of this month. A “certificate of credit” that commits financing. Kioxia Holdings and Western Digital will finalize the details of a merger agreement after receiving funding guarantees.
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