Western Digital in talks with Kioxia for a $20+ billion merger

Another year, another major merger that looks to be prompted by the ongoing chip shortages. The 3D NAND flash memory market could soon see Western Digital buying out Kioxia in a deal that may end up valued at more than $20 billion. Not quite as big as the Nvidia-ARM or AMD-Xilinx deals, but an important consolidating move nonetheless, as the combined NAND memory market shares of the two companies would threaten Samsung’s leading position.

WD and Kioxia have been collaborating for around 20 years now and this is not the first time the companies looked at a possible merger. Kioxia is actually Toshiba’s memory division that emerged as a separate entity in 2017, when the Japanese parent company experienced severe financial troubles. Back then, WD offered to buy Kioxia for $18.2 billion, but the deal was rejected. Meanwhile, Kioxia started preparing for an IPO, and Micron seemed interested in a buyout. Apparently, Micron dropped its plans, and now WD and Kioxia have been discussing a possible merger for the past two weeks. WD is ready to pay with its $19 billion stock, while the merged companies would be run by WD’s CEO David Goeckeler.

Things are not yet too clear and Kioxia may still opt for an IPO if the deal does not get the blessing of the Japanese government. However, if the two companies reach an agreement, the transaction could be officialized in mid-September.

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