Western Digital and Kioxia Merger Blocked By SK Hynix & Bain Capital

Western Digital and Kioxia were recently in talks to close a potential merger of the two companies with an aim by the end of October, unfortunately for the two storage giants, SK Hynix has not approved the deal effectively cancelling it.

WD & Kioxia Deal Scrapped

A report from NIKKEI Asia has confirmed that the merger deal between the two companies has been terminated and WD has exited talks after they failed to gain approval from SK Hynix who are an indirect shareholder in Kioxia as well as Bain Capital, Kioxia’s primary shareholder. During an earnings call (seekingalpha.com, Via TomsHardware) Kim Woo-Hyun Chief Finance Officer at SK Hynix made the following statement in response to a question about the deal;

“The company is not agreeing to the deal at this time, in light of the overall impact on the value of the company’s investment in Kioxia. Please understand that we cannot disclose the specific reasons or comment on the deal process due to the confidentiality agreements with Bain. But I do wish to make one thing clear, we will be making the decision for the sake of all stakeholders, not only the shareholders but also Kioxia as well.”

This deal would have without a doubt caused a bit of a stir in the market so it makes sense why SK Hynix have made their opposition clear. I guess this can be swept under the rug for now though Kioxia and Western Digital will still continue to work together with chip development and production.