Western Digital and Kioxia speeding up merger talks amid weak industry trends – report

Western Digital (NASDAQ:) and Kioxia Holdings Corp are speeding up merger talks and discussing a deal structure as both companies continue to be pressured by a slump in demand for memory products, Reuters reports.

Excess inventory amid weak demand in the memory market hit both companies hard. The two companies believe that a single entity would be better positioned to compete against rivals, like Samsung Electronics (KS:).

The merged entity would be 43% owned by Kioxia, 37% by Western Digital, and the rest by existing shareholders of the companies, Reuters added.

Western Digital shares are up about 3% in premarket on the Reuters story.

The planned merger is likely to attract anti-trust scrutiny, likely in the United States and China.

Activist investor Elliott Management has a stake in WDC and is pushing for changes. On the other hand, Toshiba (TYO:) has a 40.6% stake in Kioxia. Elliott is also a shareholder of Toshiba.