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February 4, 2016updated 04 Sep 2016 10:32pm

EU Commission clears SanDisk acquisition by Western Digital

The $19bn deal was signed in October.

By CBR Staff Writer

The European Commission has concluded Western Digital’s $19bn acquisition of its rival SanDisk would not adversely affect competition in Europe.

Western Digital and SanDisk both provide computer storage systems, such as hard disk drives or solid state drives based on flash memory, for the consumer electronics and enterprise markets.

Western Digital manufactures and supplies hard disk drives for consumer use in personal computers and consumer electronics as well as for enterprise use in cloud computing and data centres. It also produces enterprise class solid state drives based on flash memory technology.

SanDisk specialises in producing flash memory storage systems such as solid state drives for enterprise and consumer use as well as removable cards, USB flash drives and embedded flash products for mobile devices and consumer electronics.

The acquisition was announced in October 2015 and was notified to the commission in December 2015.

Acquisition of 100% stake in SanDisk Is expected to expand Western Digital’s market share in computer storage systems, hard disk drives and solid state drives.

Commissioner in charge of competition policy, Margrethe Vestager said:: "I am pleased that we have been able to ensure that this multi-billion dollar deal in a fast-developing industry can go ahead without delay.

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"We have worked efficiently, in cooperation with our US counterparts, to scrutinise this takeover in the strategically important IT sector and concluded that there would be no adverse effects on either retail or commercial customers".

An investigation undertaken by the commission has found that though the acquisition will bring in relatively higher market share for the company, it is not a concern as the company might continue to face competition from players such as Intel, Toshiba, Micron and Samsung.

The commission has also investigated the vertical link between activities of SanDisk in the production of flash memory and downstream markets for enterprise solutions for flash memory storage. It concluded that acquisition cannot restrict access for flash memory for competitors.

Western Digital CEO Steve Milligan previously said: "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."

"The combined company will be ideally positioned to capture the growth opportunities created by the rapidly evolving storage industry."

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