Western Digital in talks to buy SanDisk

Western Digital is in advanced talks to buy SanDisk. A deal between the two California companies could be announced as early as this week.

According to a Bloomberg report, citing unnamed sources, Western Digital is offering a price of between $80 (£51.6, €70.5) and $90 for each SanDisk share but no agreement has been reached yet. SanDisk is additionally believed to have spoken to Micron Technology to be acquired. SanDisk shares are currently trading at about $72 per share.

SanDisk has a market capitalisation of $14.6bn (£9.4bn, €12.9bn), and claims to be the third-largest flash memory manufacturer, behind Samsung and Toshiba. The company designs NAND flash memory solutions and storage products for mobile devices and computers. Its products are available at more than 300,000 retailers in over 100 countries.

SanDisk manufactures chips using Toshiba's foundries under an intellectual property-sharing joint venture. Analysts believe Toshiba would prefer a deal with Western Digital, rather than Micron. This is because Micron has its own foundries to manufacturer memory chips and is a leading competitor of Toshiba.

Western Digital has a market cap of nearly $22 billion and recently received a $3.8 billion investment from China's Tsinghua University. This new cash infusion is expected to be used for the proposed acquisition.

While SanDisk has a strong presence in the memory chip market, Western Digital is one of the largest makers of computer hard disk drives. A merger of the two would help both companies expand their global presence. Also, the joint entity would be a more formidable competitor to existing players in both flash storage and hard drive markets.