Hard disk drive maker Western Digital said it would buy memory chip maker SanDisk for about US$19 billion, the latest in a wave of consolidation in the chip-making industry.
The cash-and-stock offer values SanDisk at US$86.50 per share, or a total equity value of about US$19 billion, using a five-day volume weighted average price ending on 20 October of US$79.60 per share of Western Digital stock.
SanDisk's shares rose 6.4 percent to US$80 in pre-market trading. Western Digital's shares were down 1.1 percent at US$74.
Demand for cheaper chips and new products to power Internet-connected gadgets, as well as a push from technology companies to consolidate suppliers, has led to record levels of dealmaking in the semiconductor sector this year.
The value of the SanDisk acquisition will depend on the closing and approval of an investment from a unit of China's state-backed Tsinghua Holdings, Unisplendour Corp, in Western Digital, the companies said on Wednesday.
The deal is expected to close in the third calendar quarter of 2016.
(Reporting by Abhirup Roy and Devika Krishna Kumar in Bengaluru; Editing by Don Sebastian and Anil D'Silva)
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