Western Digital Corp. shares slid as much as 4.7% on a report that its potential deal with Kioxia Holdings Corp. faces pushback from South Korea’s SK Hynix Inc., which needs to provide consent for the transaction.
(Bloomberg) — Western Digital Corp. shares slid as much as 4.7% on a report that its potential deal with Kioxia Holdings Corp. faces pushback from South Korea’s SK Hynix Inc., which needs to provide consent for the transaction.
Western Digital has been in discussions about merging its flash memory business with Kioxia, whose banks have been lining up financing for the deal, Bloomberg reported last month. Western Digital’s hard drive business is expected to remain separate and isn’t part of the transaction.
But SK Hynix, an indirect stakeholder in Kioxia, has misgivings about the plan, Nikkei reported. SK Hynix also has approached SoftBank Group Corp. about teaming up in case the transaction fails, the newspaper reported.
Representatives for SK Hynix and Kioxia didn’t immediately respond to requests for comment after business hours. Western Digital declined to comment.
Shares of Western Digital were down 3.2% to $44.27 as of 12:19 p.m. in New York. They had climbed 45% this year through Monday’s close.
Western Digital and Kioxia initially aimed to reach a merger agreement in August, but discussions bogged down as the two sides tried to work out details. The companies already have a joint venture that produces flash chips, but joining forces would help them take on Samsung Electronics Co. in the market.
–With assistance from Liana Baker.
(Updates with response from Western Digital in fourth paragraph.)
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