The merger with the armour failed, and Western Digital announced that it would split into two companies.

CTOnews.com, October 30 (Xinhua): Xia Xia (formerly Toshiba Storage, sold to Bain Capital for $18 billion in 2018 and renamed Kioxia in October 2019) and Western Digital have been in merger negotiations since 2021, and the merger was opposed by SK Hynix, so the merger negotiations were suspended on October 26.

Western Digital announced on Monday that it would split into two separately listed companies focusing on the hard disk and flash memory markets after deadlocked merger talks with Kioxia.

As of CTOnews.com, Western Digital shares were up more than 10 per cent before trading.

The company launched a review last year after activist investor Elliott Management disclosed its stake of nearly $1 billion in Western Digital and pushed it to spin off the businesses.

The deal began to get complicated last week when it was reported that merger talks between Western Digital and Xia had reached an impasse due to opposition from Armor investor SK Hynix.

According to reports, Western Digital has been trying to cope with the global chip surplus and weak demand for flash memory products, which in turn increases the pressure on chipmakers to integrate.

If the Western Digital and armour transactions are successful, the combined company will account for 1/3 of the global NAND flash memory market and be on a par with the leading manufacturer Samsung Electronics, which is bound to pose a threat to the position of SK Hynix, the world's third largest NAND flash memory manufacturer.

"given the current constraints, it has become increasingly clear to the board in recent weeks that a spin-off is the next step in the right development of Western Digital and will put the company in the best position to release value for our shareholders," said David Goeckeler, chief executive.

According to the company's plan, the separation of these businesses will be tax-free and is scheduled to be completed in the second half of 2024.