Toshiba looking at SanDisk after Samsung offer fails
By Michael W. Jones
The ailing economy continues to have a significant negative effect on the technology sector. Falling share prices in SanDisk is prompting the second move in as many months to buy the ailing flash memory company’s chipmaking facilities in Japan. Last month, the suitor was memory giant Samsung, whose bid was rejected by SanDisk as being too low. The newest company to show an interest in the facilities is tech behemoth Toshiba.
Samsung’s offer to buy SanDisk was made public on September 16, apparently after the target company had rejected a private offer. That offer totaled some $5.85 billion for the flash-memory maker, who holds the number one position in the United States market. SanDisk, which is based in Mountain View, CA, apparently felt that the Samsung offer undervalued its assets. The SanDisk board indicated that it was open to talks about a higher offer that would reflect what they felt was the “intrinsic value” of the company.
The deal was widely seen to be a good one for Samsung. It would have been a positive move for manufacturing consolidation, since Samsung manufactures memory chips based on NAND technology, while SanDisk manufactures final consumer products which are based on NAND memory chips. The acquisition could therefore have provided Samsung with manufacturing cost savings and streamlining of manufacturing processes, as well as improvements in economies of scale.
Analysts said that there was some feeling on the part of Toshiba that it needed to protect it’s own market interests by offering to buy the equipment in Japan. Toshiba is already involved in the facilities under discussion, which are a joint venture between Toshiba and Sandisk. The possible move is being seen as Toshiba’s attempt to protect its production capabilities should the Samsung takeover of SanDisk eventually go ahead. Toshiba is already the majority owner of the equipment, with a share of 50.1%.
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