In 2015, Western Digital acquired SanDisk, a well-known flash memory company, in a cash and stock transaction of US$19 billion. Today, however, Western Digital announced a completely opposite decision, planning to spin off its flash memory business into an independent company.
Western Digital said in a press release:
After completing its strategic assessment, Western Digital, after comprehensively considering various options, believes that to realize its maximum value, the best and most feasible option at present is to spin off its flash memory business. To this end, Western Digital believes that the timing is favorable to implement an independent separation strategy to create value for shareholders as industry conditions improve.Western Digital CEO David Goeckeler said in a press release that the company has established “independent flash and HDD product business units and separated operating capabilities” over the past few years. He believes this new initiative will “further position each company for long-term success in the coming years.”
It is noted that the plan to spin off Western Digital’s flash memory and HDD businesses still needs to be approved by the board of directors, as well as other conditions, such as the availability of financing and a way to make the separated structure tax-free. The divestiture is currently expected to be implemented in the second half of 2024.
This follows Western Digital’s recent merger talks with another flash memory company, Japan’s Kioxia. However, those talks stalled last week after SK Hynix, one of Kioxia’s investors, expressed opposition to the merger, according to Reuters. Western Digital made no mention of deal talks with Kioxia in today’s press release or financial call. .
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