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Whispers of merger talks between Japanese chipmaker Kioxia and Western Digital Corp. (NASDAQ:WDC) have once again emerged, showing potential for a partnership that could significantly impact the semiconductor industry.
Bain Capital, a major stakeholder in Kioxia, is reportedly in discussions with SK Hynix to resurrect the discussions, marking an intriguing twist in the business world’s ongoing saga.
Failed Talks and Delicate Negotiations
The initial discussions, which had gained momentum, came to an abrupt halt in October. At that time, SK Hynix, an indirect shareholder in Kioxia, withheld approval for the merger, leading to a standstill in negotiations.
Reports indicated that the merger’s conditions failed to garner unanimity between the parties involved, including Kioxia’s primary shareholder, Bain Capital, and Western Digital, adding layers of complexity to the situation.
SK Hynix’s stance was clear: it would not consent to the union, fearing repercussions on its investment’s value.
A History of Potential Shake-ups
Speculations had first arisen in August 2021 about Western Digital’s close encounter with a deal to unite with Kioxia. If the stars aligned, this could have resulted in a transaction surpassing $20 billion in value, propelling both companies into uncharted waters.
Moreover, Western Digital (WDC) had signaled its openness to explore strategic alternatives, potentially including the separation of its flash and HDD business, following activist Elliott Management’s advocacy for a split, demonstrating a pattern of potential transformation.
