Western Digital buying Sandisk

[marshallh]

http://www.reuters.com/article/2015/10/21/sandisk-ma-western-digital-idUSL3N12L3UY20151021

Oct 21 (Reuters) - Hard-disk drive maker Western Digital Corp said it would buy SanDisk Corp for about $19 billion, giving it better access to flash memory storage chips used in smartphones and mobile devices.

SanDisk's shares rose to $78.76 in premarket trading, but were well below the cash-and-stock offer of $86.50 per share.

Shareholders are probably disappointed because they were likely looking for a 52-week high takeout price, Wedbush Securities analyst Betsy Van Hees said.

The semiconductor industry has seen a record number of deals this year as demand for cheaper chips and products to power Internet-connected gadgets push technology companies to consolidate suppliers.

Analysts have said while Western Digital is a major player in the traditional storage industry, it needs access to SanDisk's NAND technology to better compete in the solid-state drive (SSD) market. SSDs are used in cloud computing, data centres, smartphones and laptops.

The value of the transaction depends on the closing of an investment from Unisplendour Corp Ltd, a unit of China's state-backed Tsinghua Holdings Co Ltd, in Western Digital.

The deal is expected to draw intense scrutiny from both U.S. and Chinese regulators as accusations of cyber snooping increase between the two countries.