Western Digital announces acquisition of SanDisk for $19 billion

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.

The value of the SanDisk acquisition 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.

If the Unisplendour investment closes before the SanDisk acquisition, Western Digital will pay $85.10 per share in cash and 0.0176 of Western Digital shares for each SanDisk share held, the companies said on Wednesday.

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However, if the investment does not close or is terminated, Western Digital will pay $67.50 in cash and 0.2387 shares of Western Digital common stock per share of SanDisk common stock.

The deal is expected to add to Western Digital’s adjusted earnings within the first 12 months of its closing.

Western Digital’s shares were down 2.8 percent at $72.75 in premarket trading.

BofA Merrill Lynch and J.P. Morgan are lead financial advisers and Credit Suisse is also advising Western Digital. Cleary Gottlieb Steen & Hamilton LLP and Baker & McKenzie are legal advisers to Western Digital.

Goldman Sachs is the financial adviser to SanDisk. Skadden, Arps, Slate, Meagher & Flom LLP is its legal adviser.