Storage-hardware maker Western Digital (WDC) is buying flash-memory giant SanDisk (SNDK) for $19 billion, or $86.50 per share.
SanDisk stockholders will get $85.10 in cash and 0.0176 shares of WDC for each share of SNDK, which closed at $75.19 on Tuesday.
“Western Digital and SanDisk’s complementary product lines, including hard disk drives, solid-state drives, cloud datacenter storage solutions and flash storage solutions, will provide the foundation for a broader set of products and technologies from consumer to datacenter,” Western Digital management said in a press release.
This deal is about more than two companies coming together to sell stuff. The combined company expects to leverage each other’s capabilities in order to cut costs.
“The company expects to achieve full annual run-rate synergies of $500 million within 18 months post-closing,” the announcement said. “The transaction is expected to be EPS accretive on a non-GAAP basis within 12 months of the transaction close.”
“Synergies” usually means combining and closing offices and reducing headcounts.
“This transformational acquisition aligns with our long-term strategy to be an innovative leader in the storage industry by providing compelling, high-quality products with leading technology,” Western Digital CEO Steve Milligan said. “The combined company will be ideally positioned to capture the growth opportunities created by the rapidly evolving storage industry.”