A PYMNTS Company

Western Digital and Japan’s Kioxia Terminate Merger Talks

By  |  October 26, 2023
The Prevalence of Coordinated Effects Theories in Uk and EC Merger Cases

Western Digital and Japan’s Kioxia have officially terminated their discussions aimed at creating one of the world’s largest chipmakers, Nikkei reported on Thursday. The two companies would have failed to reach a mutual agreement on the conditions of the proposed merger. Furthermore, a major shareholder of Kioxia, Bain Capital, also posed a hurdle to the negotiations.

    Get the Full Story

    Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

    Subscribe to our daily newsletter, PYMNTS Today.

    By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions.

    Adding to the complexity of the situation, South Korea’s SK Hynix, a significant investor in Kioxia and a major competitor to both Western Digital and Kioxia, expressed its disapproval of the potential merger. SK Hynix cited concerns over the impact the merger could have on the value of its investment assets.

    We’d love to be your preferred source for news.

    Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!

    Add as Preferred Source

    Read more: Kioxia, Western Digital Speed Up Merger Talks

    According to Reuters, the proposed combination of their flash memory businesses had the potential to grant the merged entity a substantial share of the global NAND flash market, rivaling the position of the industry leader, Samsung Electronics. This development posed a significant threat to SK Hynix, which holds the third position globally as a NAND flash memory manufacturer.

    The announcement of the termination of merger talks had an immediate impact on Western Digital’s stock, as its shares plummeted by 11.2%. These discussions were initiated in response to the challenges faced by the global chip industry, including a surplus of chips and weakened demand for flash memory chips. These factors had exerted considerable pressure on chip manufacturers, prompting them to explore consolidation opportunities.

    Source: Reuters