WDC - Western Digital gains on report merger talks with Kioxia restarted

Western Digital Corp. ( NASDAQ: WDC ) rose 8% in after hours trading after a report that the memory-chip firm has resumed merger talks with Japan's Kioxia Holdings.

The parties are discussing merging into one public company, according to a Bloomberg report , which cited people familiar. The talks resumed late last year are still at an early stage.

The report comes after initial talks between the companies for a merger stalled in October 2021. The WSJ and others first reported in August 2021 that Western Digital was close to a deal to merge with Kioxia in a transaction that could be worth more than $20 billion.

The news also comes after Western Digital ( WDC ) announced in June that it was exploring strategic alternatives, including separating its flash and HDD business. The disclosure followed after activist Elliott Management disclosed a stake in May and pushed for the company to explore separating the company.

Kioxia is owned by private-equity firm Bain Capital. While the company's name might not be as well-known outside of Japan, it was once called Toshiba Memory and has a long track record in the semiconductor industry.

Kioxia, the world's second-biggest maker of NAND flash memory chips, was also said in 2021 to be considering an initial public offering if it didn't merge with Western Digital ( WDC ).

Memory chip giant Micron Technology ( MU ) rose 1.6% in after hours trading, while Western Digital rival Seagate ( STX ) gained 2.9%.

Earlier a Daiwa analyst said Micron may have 30% upside as the memory market may be close to bottoming.

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