DailyTech - SanDisk Buys M-Systems for $1.35 Billion

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IT SanDisk Buys M-Systems for $1.35 Billion
Tuan Nguyen (Blog) - July 31, 2006 5:54 PM

8 comment(s) - last by rupaniii.. on Aug 1 at 4:42 PM

The flash memory market just became a lot more competitive

In what continues to be a wave of large acquisitions, SanDisk announced today that it has agreed to buy M-Systems Flash Disk Pioneers Ltd. for $1.35 billion in stock. M-Systems is an Israeli competitor of SanDisk. According to SanDisk, the deal brings together strengths of both SanDisk and M-Systems. According to SanDisk's press release:

SanDisk Corporation and Msystems Ltd. today entered into definitive agreements for SanDisk to acquire Msystems in an all stock transaction. This combination joins together two flash memory pioneers with complementary products, customers and channels. Together the combined company will have the people, technology, manufacturing and IP to play a leading role in creating new markets and accelerating the penetration of flash memory into existing storage applications.

SanDisk's CEO Eli Harari believes that the NAND flash market is largely "untapped." Indeed there have been significant developments in the flash memory industry since the start of the year. SanDisk itself recently announced that it will cooperate with Toshiba a massive NAND flash fabrication facility in Japan. The new facility will produce memory cells on 300mm wafers and is set to go into production sometime in Q4'07. Earlier this month, Intel and Micron's joint company, IM Flash Technologies, announced that it had produced the world's first 50nm flash cell.

While the SanDisk acquisition means good news for M-Systems, the company is currently under investigation with the US Securities and Exchange Commission and the Department of Justice for allegedly backdating illegal stock option grants. Currently, a number of other companies are under investigation, including Apple.

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This makes sense.

By Dfere on 8/1/2006 7:39:51 AM , Rating: 3

Sandisk gets a deal with Toshiba, greatly increasing its manufacturing capacity... so then it needs to sell it. Buy a competitor with a different distribution channel and "complimentary products". It is just going to suck for whoever was the supplier for M-Systems. Sell that stock now.

BTW, I think companies always live by the motto "Grow or Die", so any chance to buy a competitor when you think you can cover the costs will be acted on. My 2 cents.

RE: This makes sense.

By Master Kenobi

(blog) on 8/1/2006 7:51:32 AM , Rating: 2

quote:
I think companies always live by the motto "Grow or Die", so any chance to buy a competitor when you think you can cover the costs will be acted on.

^--QFT

Parent

i wonder...

By One43637 on 7/31/2006 6:06:06 PM , Rating: 2

regarding the recent slew of takeovers, mergers and acquisitions, i wonder what's next....

RE: i wonder...

By rupaniii on 8/1/2006 4:42:59 PM , Rating: 2

Well, next is the US takeover and democratization of Cuba for preperation into Statehood... I love looking more and more like i'm right. I'm curious if he got sick on his own or had help. As for business.. ATi is interesting. I'd really love a CoProcessor on board that, for instance, had Physics and HighDef Video Decoding in an second AM3 socket. There's much better things to do with 4x4 than integrate 3D into the picture. Dual Core cpu and a Dual Core/purpous Media/Physics processor. I'd even love to have some dedicated Ram on the mobo for it. I have a feeling that's why the Asochronous Crossfire was being developed.

Parent

Buyouts since the beginning of the year?

By dagamer34 on 7/31/2006 7:27:45 PM , Rating: 2

Anyone have a list of all the buyouts, mergers, and cooperative agreements that have happened since the beginning of this year? I'd like to know how much I'm going to get screwed in years to come if we don't keep track of who has majority control of certain markets. :P

RE: Buyouts since the beginning of the year?

By TomZ on 7/31/2006 8:48:13 PM , Rating: 2

Mergers and acquisitions happen all the time in established industries. I don't think we can assume that all of these are bad for the consumer. Sometimes these transations give the resulting companies the ability to set prices and limit choices for consumers, but I don't think that most are like that.

Parent

backdating illegal stock option grants

By lemonadesoda on 7/31/2006 6:15:39 PM , Rating: 3

The SEC needs to get tough. Proper Corporate Governance seems to be sadly going down the toilet.

Xbox360

By therealnickdanger on 8/1/2006 8:55:01 AM , Rating: 2

If I remember correctly, M-Systems designed and/or manufactured the flash used by the Xbox360... I can't remember if it was for the memory cards or for the BIOS...