Western Digital gains on report it's trying to reach deal with Kioxia by next month
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Western Digital (NASDAQ:WDC) rose 1.6% amid a report that the memory-chip maker and Kioxia Holdings are trying to come to an agreement on a deal by next month.
A transaction is expected to be structured as a tax-free spinoff of Western Digital's flash business, which will merge with Kioxia, according to a Bloomberg report on Friday, which cited people familiar with the matter. WDC holders will own slightly more than half of the merged company.
The new company will be run by Kioxia executives, with Western Digital (WDC) executives also involved, according to the report. The merged entity would trade on the Nasdaq, though it would eventually list on the Tokyo Stock Exchange.
The latest update on a potential deal comes after Reuters said in May that discussions with Kioxia Holdings are speeding up and getting closer to a deal structure.
Bloomberg reported in January that talks about a potential merger were advancing with rough structure including a dual-listing in Japan being possible part of the deal.
The news also comes after Western Digital (WDC) announced in June of last year that it was exploring strategic alternatives, including separating its flash and HDD business, which followed after activist Elliott Management disclosed a stake in May and pushed for the company to explore separating the company.
The WSJ and others first reported in August 2021 that Western Digital was close to a deal to merge with Kioxia in a transaction that could be worth more than $20 billion.
Memory chip giant Micron Technology (MU) ticked up on Friday, while Western Digital rival Seagate (STX) drifted down 0.5%.
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