Kioxia and Western Digital are reportedly merging again, and are discussing details such as capital ratios

Japanese memory manufacturer Kioxia and U.S. manufacturer Western Digital (WD), which have repeatedly been rumored to merge. According to Reuters, the performance of Kioxia and Western Digital has deteriorated due to the downturn in the NAND Flash market. In order to strengthen their competitiveness, so both parties are discussing a merger.

According to two people familiar with the matter, Kioxia and Western Digital are discussing the merger and have entered the stage of details such as the capital ratio of both parties. The new company after the merger will be led by Western Digital in its business, marketing and other parts, while the manufacturing part will be led by Kioxia. The new company will aim to go public.

The possible investment proportions of the new company after the merger are 43% for Kioxia and 37% for Western Digital, with the remaining 20% ​​held by the existing shareholders of the two manufacturers. It's unclear what existing Kioxia shareholders like Toshiba think of the merger.

Toshiba holds 40.64% of Kioxia's shares, the investment alliance led by Bain Capital in the United States accounts for 56.24%, and Japanese manufacturer Hoya accounts for 3.13%. As for Witten, American investment fund Elliott Investment Management will invest approximately US$1 billion in shares in 2022.

According to Bloomberg (Bloomberg), Elliott’s investment in Western Digital was seen as a signal that Kioxia and Western Digital were about to merge. At that time, Western Digital intended to separate the existing hard disk (HDD) business, and the remaining NAND The memory business is considered to be merged with Kioxia.

Kioxia and Western Digital rank second and fourth respectively in the global NAND market share. If the two companies merge, their market share will be equivalent to that of Samsung Electronics, which ranks first.

Kioxia was originally the memory business of Toshiba. It became independent from Toshiba in 2018 and was renamed Kioxia in October 2019. Kioxia has been preparing for an IPO since becoming independent from Toshiba, but it has been postponed due to market conditions and other environmental factors.