Kioxia And Western Digital Fast-Track Merger Discussions, Nearing A Deal - Western Digital (NASDAQ:WDC)

Kioxia Holdings Corp and Western Digital Corp WDC accelerated merger talks have progressed towards a deal as plunging market demand and oversupply of chips weighed on the companies.
Kioxia would have a 43% stake and Western Digital a 37% ownership under the deal, Reuters cites familiar sources.
Combining their flash memory businesses could boost competitiveness against rivals like South Korea's Samsung Electronics Co, Ltd SSNLF.
The planned merger will also likely draw anti-trust scrutiny in several countries, including the U.S. and China.
Activist investor Elliott Management, which owns convertible preferred shares in Western Digital, has pushed the U.S. company to split off its flash-memory business from its hard-drive division since investing in the stock in 2022.
Such a split would precede the flash memory combination with Kioxia. Also, the merged company might seek a listing after the deal.
Elliott is also a shareholder of Toshiba Corp TOSYY, which owns 40.6% of Kioxia.
Kioxia's falling valuation is one of the factors that dragged down Japan Industrial Partners (JIP) buyout offer price for Toshiba.
A combined Kioxia-Western Digital would control a third of the global NAND flash market, putting it on par with Samsung.
Analysts say Kioxia and Western Digital have been more vulnerable to NAND flash market volatility than Samsung and SK Hynix Inc.
Price Action: WDC shares traded higher by 2.72% at $33.93 premarket on the last check Monday.