Protracted merger talks between Kioxia and Western Digital's memory and NAND flash manufacturing businesses appear to have hit an unexpected roadblock, Nikkei reports, and that's SKHynix. SKHynix indirectly owns shares in Kioxia, so they need to approve the merger for it to happen.
Currently, SK Hynix is the second largest manufacturer of NAND flash memory, trailing Samsung to a certain extent, but if the KioxiaWD merger occurs, SK Hynix will be squeezed into the third position in the market, which is not good for the company.
So SK Hynix is trying to secure a rather strange option for Kioxia, which is that SK Hynix wants Japan's SoftBank (which owns companies like Arm) to step in as a partner for Kioxia. However, SK Hynix seems to have forgotten that Western Digital's memory chips are produced in the same factory as Kioxia's memory chips, so it is unlikely that Western Digital is keen to see this last-minute proposal from SK Hynix.
Based on the current asset status, after the merger of Kioxia and WD, Kioxia will own 63% of the new company's shares, and WD will own 37% of the shares. However, Western Digital aims to add more capital to the merger, giving its shareholders a final 50.1% stake in the company, while Kioxia will end up with 49.9%.
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