SanDisk said in advanced talks to sell itself to Western Digital

Storage maker SanDisk is in advanced talks to sell itself to Western Digital.
Storage maker SanDisk is in advanced talks to sell itself to Western Digital.PHOTO: SANDISK

NEW YORK (BLOOMBERG) - SanDisk Corp. is in advanced talks to sell itself to Western Digital Corp., and the two storage makers could reach a deal as soon as this week, people with knowledge of the matter said.

Western Digital is discussing a price of between US$80 and US$90 per SanDisk share, according to two of the people, who asked not to be identified because the information is private. SanDisk closed at US$72 in New York trading on Monday (Oct 19).

While no agreement has been signed and talks could still fall apart, negotiations accelerated over the weekend, the people said.

SanDisk has spoken with both Western Digital and Micron Technology Inc. about a deal, people familiar with the matter said last week. The company plans to report earnings Oct 21 after the market closes.

SanDisk shares rose as much as 13 per cent in extended trading on Monday. At their close in New York on Monday, the company had a market capitalization of about US$14.7 billion (S$20.42 billion), after climbing more than 16 per cent since Bloomberg reported it was exploring a sale Oct 13.

It's one of the largest makers of flash memory, a type of chip that's used as storage in mobile devices and increasingly in computers and data centers. Last month Western Digital got a US$3.8 billion investment from China's Tsinghua University, adding to its funds available to make deals.

This year to date has been the biggest ever for semiconductor mergers and acquisitions. Companies in the US$300 billion industry are facing rising costs and a shrinking customer base, encouraging them to get together to add scale.