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Western Digital to buy SanDisk in $19 billion takeover connected to flash memory

Hard drive maker Western Digital on Wednesday announced a $19 billion deal to acquire SanDisk, reflecting a shift in the storage industry away from magnetic hard disks towards solid-state drives and other forms of flash memory.

WD is offering $86.50 per share in terms of cash and stock, Reuters reported. During Wednesday trading SanDisk stock surged as high as $78.48 on the news. The exact value of the transaction, though, will depend on the closing on an investment from China's Unisplendour Corporation, part of the state-supported Tsinghua Holdings.

Because of that link, the deal could face scrutiny from the U.S. and Chinese governments, both of which are increasingly concerned about hacking and espionage. The arrangement does however have the support of Toshiba, which has an intellectual property-sharing joint venture with SanDisk. The latter, in turn, uses Toshiba foundries to produce chips.

WD shares are down in Wednesday trading, and the company has suspended its share buyback program.

While conventional hard disks still offer a better price-to-gigabyte ratio, the speed and reliability of SSDs has made them increasingly popular in desktop, laptop, and server PCs. All of Apple's MacBooks are SSD-based, for instance, and even the iMac has a number of flash configurations.