Western Digital walks away from Kioxia merger talks

Western Digital walks away from Kioxia merger talks

The proposed merger of the NAND flash memory divisions of Kioxia and Western Digital is now off the table. Talks on this merger have been halted by Western Digital due to the lack of approval from Kioxia shareholder SK Hynix.

According to Nikkei Asia, Western Digital broke off talks with Kioxia on the merger of its NAND flash memory divisions, which were at an advanced stage, yesterday. The reason for stopping the merger talks is that Korean chip maker SK Hynix, a major shareholder in Kioxia, opposed the deal.

The Korean chipmaker feared that the merger would affect the value of its investments in the Japanese chipmaker and also sidetrack joint projects.

The deal was supposed to close at the end of this month.

Also read: SK Hynix opposes merger of Kioxia and Western Digital

Talks with Bain Capital also halted

Talks with Kioxia’s owner, Korean investor consortium Bain Capital, have also stopped. Also with this company, Kioxia and Western Digital could not agree on the terms of the merger of the NAND flash memory businesses.

According to Reuters, however, both companies are still interested in closing the deal at a later date.

Other partnerships continue

Kioxia and Western Digital also cooperate in chip design and manufacturing. In addition, Western Digital is investing in Kioxia’s chip factories in Japan. These activities will continue despite the scrapping of the NAND deal.

The two companies have been talking to each other about a possible merger since 2021. Each time, the talks foundered on various issues, such as corporate value. The attitude of regulators was also often a source of concern.