Following the previous reports, Western Digital and SanDisk today announced that they have entered into a definitive agreement under which Western Digital will acquire all of the outstanding shares of SanDisk for a combination of cash and stock. The offer values SanDisk common stock at $86.50 per share or a total equity value of approximately $19 billion.

Unisplendour Corporation Limited had previously announced an investment in Western Digital. In case that transaction close prior to the acquisition, Western Digital will pay $85.10 per share in cash and 0.0176 shares of Western Digital common stock per share of SanDisk common stock; and if the Unisplendour transaction has not closed or has been terminated, $67.50 in cash and 0.2387 shares of Western Digital common stock per share of SanDisk common stock.

The transaction has been approved by the boards of directors of both companies.

The combination is the next step in the transformation of Western Digital into a storage solutions company with global scale, extensive product and technology assets, and expertise in non-volatile memory (NVM). With this transaction, Western Digital will double its addressable market and expand its participation in higher-growth segments. SanDisk brings expertise in NVM, systems solutions and manufacturing. The combination also enables Western Digital to vertically integrate into NAND, securing long-term access to solid state technology at lower cost.

Last week, China’s Ministry of Commerce (MOFCOM) allowed Western Digital to integrate substantial portions of its WD and HGST businesses.

"This transformational acquisition aligns with our long-term strategy to be an innovative leader in the storage industry by providing compelling, high-quality products with leading technology," said Steve Milligan, chief executive officer, Western Digital. "The combined company will be ideally positioned to capture the growth opportunities created by the rapidly evolving storage industry. I’m excited to welcome the SanDisk team as we look to create additional value for all of our stakeholders, including our customers, shareholders and employees."

Western Digital and SanDisk’s complementary product lines, including hard disk drives, solid-state drives ("SSDs"), cloud datacenter storage solutions and flash storage solutions, will provide the foundation for a broader set of products and technologies from consumer to datacenter. Both companies have strong R&D and engineering capabilities and hold over 15,000 combined patents issued or pending worldwide.

Toshiba has been a long-term strategic partner to SanDisk for 15 years. The joint venture (JV) with Toshiba will be ongoing, providing stable NAND supply at scale through a time-tested business model and extends across NVM technologies such as 3D NAND.

Steve Milligan will continue to serve as chief executive officer of the combined company, and the company will remain headquartered in Irvine, California. Upon closing, Sanjay Mehrotra is expected to join the Western Digital Board of Directors.

The transaction is expected to close in the third calendar quarter of 2016.