Creating a global storage leader
The rationale for the SanDisk-Western Digital merger is to create a global leader in storage technology. The merger also helps position Western Digital in the faster growth segments and cements its leadership in nonvolatile memory. Through SanDisk’s (SNDK) joint venture with Toshiba, Western Digital (WDC) will have access to NAND flash memory. Western Digital and SanDisk will have complementary product lines including hard disk drives, solid-state drives, cloud storage, and flash storage.
Comments from management
“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,” said Steve Milligan, chief executive officer of Western Digital. “The combined company will be ideally positioned to capture the growth opportunities created by the rapidly evolving storage industry. I’m excited to welcome the SanDisk team as we look to create additional value for all of our stakeholders, including our customers, shareholders and employees.”
“Western Digital is globally recognized as a leading provider of storage solutions and has a 45-year legacy of developing and manufacturing cutting-edge solutions, making the company the ideal strategic partner for SanDisk,” said Sanjay Mehrotra, president and chief executive officer of SanDisk. “Importantly, this combination also creates an even stronger partner for our customers. Joining forces with Western Digital will enable the combined company to offer the broadest portfolio of industry-leading, innovative storage solutions to customers across a wide range of markets and applications.”
The companies expect to generate annual run-rate synergies of $500 million per year within 18 months of closing. After one year, the deal is expected to be accretive to non-GAAP EPS. The companies expect the transaction to increase margins immediately.