Western Digital Corp. is in advanced talks to merge with Japan’s Kioxia Holdings Corp., according to people familiar with the matter, in a deal that could be valued at more than $ 20 billion and will rearrange the global chip industry.
Long-running discussions between companies have intensified in recent weeks and could reach an agreement on an agreement as early as mid-September, according to people. Western Digital would pay for the deal with shares and the combined company would likely be run by its CEO, David Goeckeler, according to People.
There is no guarantee that Western Digital, which had a market value of about $ 19 billion on Wednesday afternoon, will seal a deal and Kioxia could still opt for an initial public offering it had been planning or some other combination.
The Wall Street Journal reported in March that Western Digital and Micron Technology Inc. they were examining possible deals with Kioxia, which makes NAND flash memory chips used in smartphones, computer servers, and other devices. Since then, Micron’s interest has cooled and Kioxia has focused on discussions with Western Digital, which already has deep ties to the Japanese company.
Any transaction would require the blessing of the Japanese government, given the importance of Kioxia there and the political sensibilities of transferring ownership of this key technology. Washington would probably play a role in that as well, but a deal could fit in with the U.S. push to increase its chip-making capabilities and increase competitiveness with China.