Western Digital (WDC) sinks as Kioxia merger said 'scrapped'

Shares of Western Digital (NASDAQ: WDC) shares plunged intra-day Thursday following reports from Nikkei indicating that the company's proposed merger with Kioxia had been scrapped after it couldn't gain approval from large shareholders SK Hynix and Bain Capital.

Shares of Western Digital last traded 9% lower.

The news comes just hours after SK Hynix said it opposes a merger between Kioxia and Western Digital, saying it undervalues its investment in Kioxia.

"The company is not agreeing to the deal at this time in light of the overall impact on the value of the company's investment in Kioxia," Hynix VP & Head of Finance Woo-Hyun Kim said on a call with analysts Wednesday.

While Kim said they would not disclose specific details of the negotiations, he said he wanted to make one thing clear - "We will be making the decision for the sake of all stakeholders, not only the shareholders but also Kioxia as well."

Commenting on the development, Wolfe Research analyst Chris Caso said, "it doesn't appear that a deal can be struck without Hynix approval, frustrating efforts for NAND industry consolidation."

By StreetInsider.com Staff

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