Memory Chip Merger: Western Digital and Kioxia Holdings have ceased merger talks, unable to reach an agreement on terms. The halt in discussions follows SK Hynix’s recent statement opposing the deal, citing its impact on investment value. Despite the setback, both companies are still interested in pursuing the merger. Talks between the memory chip giants have been on and off since 2021.
Representatives from Western Digital and Kioxia are working behind the scenes to resolve issues, including winning over Hynix. The Nikkei business daily reported that the companies couldn’t agree on conditions with top Kioxia shareholder Bain Capital.
The combined entity would command a third of the global NAND flash market, on par with Samsung Electronics, potentially challenging Hynix, the world’s third-largest NAND flash memory manufacturer.
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Antitrust concerns and Chinese regulatory hurdles have loomed over the merger, adding to the complexities of the deal. Both companies reported combined losses of approximately $1.4 billion in their latest quarterly reports.
Last year, Western Digital initiated a strategic review after activist investor Elliott Investment Management pushed for a separation of its businesses. Japanese banks were prepared to provide significant financing for the merger.
SK Hynix holds convertible bonds in Kioxia, and its approval was a precondition for the merger. The situation remains fluid as both sides continue to work towards a resolution.
Our Reader’s Queries
Is Kioxia the same as Toshiba?
As of October 1, 2019, KIOXIA Corporation has officially replaced its former name, Toshiba Memory Corporation. While some pages and documents may still refer to the old names of “Toshiba Corporation” or “Toshiba Memory Corporation,” please note that they now correspond to the new company name.