Hard disk drive major Western Digital Corporation is set to acquire memory chipmaker SanDisk Corporation for about $19 billion in order to extend its reach in the global storage space.
The cash-and-stock deal is the latest instance of consolidation in the storage space.
Western Digital's offer values SanDisk at $86.5 per share, a 15 per cent premium over Tuesday's closing price on NASDAQ, as per a press statement.
Steve Milligan, chief executive officer, Western Digital, said: "The combined company will be ideally positioned to capture the growth opportunities created by the rapidly evolving storage industry.
The transaction allows Western Digital to double its addressable market and expand participation in higher-growth segments , the company said.
SanDisk CEO Sanjay Mehrotra is likely to join the Western Digital board post the acquisition. The boards of both companies have approved the deal, which may close in the third quarter.
Western Digital expects to achieve full annual run-rate synergies of $500 million within 18 months post-closing, it said.
SanDisk was founded by Eli Harari and Mehrotra in 1988, and was originally known as SunDisk. Based in California, SanDisk is one of the largest makers of flash memory storage chips used in mobile devices, computers and data centers.
2015 has been a year of consolidation for the $300 billion semiconductor industry. Many industry majors are joining forces to cut costs and deal with a shrinking client base.
Recently, Avago Tehnologies Ltd agreed to buy rival chipmaker Broadcom Corp for $37 billion. Also, Intel Corp acquired Altera Corp for about $16.7 billion.
Earlier today, Lam Research Corp said it is buying KLA-Tencor Corp for about $10.6 billion.