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Kioxia and Western Digital Merger Talks Kioxia and Western Digital – Reviving Merger Talks

Western Digital headquarters in Silicon Valley

Image Source: Sundry Photography/iStock Editorial via Getty Images

Efforts are underway for a potential resurrection of merger discussions between Japanese chipmaker Kioxia and Western Digital Corp. (NASDAQ:WDC), following the abandonment of talks in October.

Bain Capital, a crucial stakeholder in Kioxia, is reportedly engaged in negotiations with SK Hynix to explore the possibility of recommencing the conversations, as per a recent Kyodo News report citing sources familiar with the situation.

The previous round of discussions came to a standstill in October after failing to secure approval from SK Hynix, an indirect shareholder in Kioxia. Reports at the time, including one from Nikkei, indicated that the companies were unable to reach consensus on the merger’s terms and conditions. SK Hynix had expressed concerns about the potential impact on the value of its investment, leading to its disapproval of Kioxia’s merger with Western Digital’s (WDC) flash memory business.

The potential deal, speculated to be worth over $20 billion, had been in the offing with Western Digital announcing its exploration of strategic alternatives, including a split of its flash and HDD business, in June 2022. This move followed a disclosure of a stake in the company by activist Elliott Management in May 2022, urging the exploration of separation options.

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