Western Digital and Kioxia flash memory business merger is about to finalize plans
Over recent times, Western Digital and Kioxia have been in negotiations concerning the merger of their NAND flash memory production endeavors, with final plans imminent. According to prevalent media sources, intricate details of the transaction remain under scrutiny. Should all progress favorably, Western Digital and Kioxia are poised to establish the world’s preeminent NAND flash manufacturer.
This strategic alignment between Western Digital and Kioxia will fortify their competitive edge in the NAND flash domain, posing a formidable challenge to Samsung’s market supremacy and escalating the stakes for both SK Hynix and American contenders. Nevertheless, the path to amalgamation brims with potential pitfalls, such as rigorous evaluations from regulatory bodies worldwide, coupled with opposition from competitors and stakeholders alike. Given the current stringent assessments against monopolization and the repercussions of geopolitical intricacies, the merger’s feasibility is shrouded in ambiguity.
Previous reports intimate that financial institutions, including Sumitomo Mitsui Financial Group, Mizuho Financial Group, and MUFG Bank, are set to facilitate refinancing for the merger, amassing to approximately 2 trillion yen (roughly $133.74 billion USD). A portion of this financing is earmarked for disbursing special dividends to Kioxia’s extant shareholders. Bain Capital and Toshiba currently retain approximately 56.24% and 40.64% of Kioxia’s shares, respectively. Within the nascent conglomerate, Kioxia and Western Digital are projected to hold stakes of 50.5% and 49.5%, respectively. A bicameral board system will be implemented, with headquarters anchored in Japan and the executive echelon predominantly comprising Kioxia’s original personnel. Initial plans advocate for a listing on the New York NASDAQ, followed by an introduction to the Tokyo Stock Exchange.
Data from TrendForce suggests that in the second quarter of 2023, Kioxia commanded a market share of 19.6%, while Western Digital accounted for 14.7%. Samsung and SK Hynix secured respective shares of 31.1% and 17.8%. Consequently, upon the merger of Kioxia and Western Digital, their collective market share would burgeon to 34.3%, eclipsing Samsung and emerging as the predominant NAND flash supplier.
