Merger imminent, Western Data and Kioxia Holdings receive $12.7 billion in financing
Western Data and Kioxia Holdings have secured a financing of 1.9 trillion yen (12.7 billion US dollars) from a group of Japanese banks, paving the way for the merger of the two chip manufacturers.
The two manufacturers are expected to sign a preliminary agreement this month. The transaction basically involves equity exchange between the two parties, but the loan borrowed during the restructuring of Kioxia in Japan needs to be refinanced.
To this end, Japan's three major banks and the nationally supported Japan Development Bank will provide 1.9 trillion yen. This financing will include a loan commitment of 400 billion yen that Kioxia can use as working capital.
Western Data Corporation, headquartered in the United States, plans to integrate its memory business with its peer Kioxia into a holding company.
Kioxia is the third largest flash memory company in the world, and Western Data ranks fourth. The planned merger entity will be at the same level as the world's leading Samsung Electronics company.
The merged entity will be registered in the United States but headquartered in Japan. According to enterprise value calculations, Kioxia will hold 63% of the new company's shares, with Western Data accounting for 37%.
After the capital adjustment, Western Data shareholders will own 50.1% of the holding company's shares, while Kioxia will own 49.9% of the shares.
Partners hope that the new entity will be listed on the Nasdaq and Tokyo Stock Exchange. The President of Kioxia will serve as the President of the new company, and Kioxia will control a majority of the seats on the board.
Kioxia and Western Data produce NAND flash memory, which is a semiconductor that can store data for a long time. The two companies have invested in the construction of production centers in Sanchong Prefecture and Iwate Prefecture in Japan, each bearing half of the costs.
The scale generated by the merger is expected to enhance their ability to purchase equipment and materials.
Toshiba divested Kioxia in 2018, with a consortium led by Bain Capital holding approximately 60% of the shares. Kioxia has been approved for listing in 2020, but due to increased tensions between China and the United States, its initial public offering was postponed shortly before the planned date.
To this end, Japan's three major banks and the nationally supported Japan Development Bank will provide 1.9 trillion yen. This financing will include a loan commitment of 400 billion yen that Kioxia can use as working capital.
Western Data Corporation, headquartered in the United States, plans to integrate its memory business with its peer Kioxia into a holding company.
Kioxia is the third largest flash memory company in the world, and Western Data ranks fourth. The planned merger entity will be at the same level as the world's leading Samsung Electronics company.
The merged entity will be registered in the United States but headquartered in Japan. According to enterprise value calculations, Kioxia will hold 63% of the new company's shares, with Western Data accounting for 37%.
After the capital adjustment, Western Data shareholders will own 50.1% of the holding company's shares, while Kioxia will own 49.9% of the shares.
Partners hope that the new entity will be listed on the Nasdaq and Tokyo Stock Exchange. The President of Kioxia will serve as the President of the new company, and Kioxia will control a majority of the seats on the board.
Kioxia and Western Data produce NAND flash memory, which is a semiconductor that can store data for a long time. The two companies have invested in the construction of production centers in Sanchong Prefecture and Iwate Prefecture in Japan, each bearing half of the costs.
The scale generated by the merger is expected to enhance their ability to purchase equipment and materials.
Toshiba divested Kioxia in 2018, with a consortium led by Bain Capital holding approximately 60% of the shares. Kioxia has been approved for listing in 2020, but due to increased tensions between China and the United States, its initial public offering was postponed shortly before the planned date.