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Apple + Samsung Tipped To Be Running A Ruler Over Struggling SanDisk

Apple + Samsung Tipped To Be Running A Ruler Over Struggling SanDisk

Back in April ChannelNews tipped that SanDisk would be put up for sale and that Samsung would be a bidder. 

Takeover speculation is now reaching fever pitch with several Companies tipped to be in the race to buy the struggling memory Company who earlier this year was dumped by Apple.

Among the Companies said to be running the ruler over SanDisk are Micron Technology, whose market capitalization is $20 billion, Western Digital, capitalization $19 billion and Seagate whose capitalization is $11.5 billion.

The potential sale comes as the storage sector has fallen on hard times in 2015, following a broad sector rally in 2013 and 2014. 

If Samsung get the business, the Australian and regional management at SanDisk are set to be retrenched with Samsung taking over sales.  

During the past two years, SanDisk gained 125% while peer players like Micron rallied over 450%. Prior to last week’s rally, SanDisk shares were down 37% year to date for 2015. 

Micron is one of the rivals that is said to be considering putting in an offer, which would make some sense although could be tricky to consummate. SanDisk jointly operates flash memory factories with Toshiba, so Toshiba would have to sign off as well.

 But the good news is that Toshiba is reportedly open to the idea. Western Digital is the other company that is tipped to be interested. 

There is also speculation that Apple could be in the bidding for the struggling Company.

  “For Apple, it’s a drop in the $115 billion in (its) net-cash-and-investments bucket.”  said one analyst.
The analyst believes the “pay out” would be rather quick and manifest itself in the form of lower NAND costs along with negotiating leverage with other suppliers.

Last year Apple acquired Beats for $3 billion. SanDisk’s current market cap is currently over $14 billion.

Motley Fool suggested that It makes a lot more sense for a peer to acquire SanDisk since operational similarities would yield significant cost-saving synergies. Considering the commodity nature of the memory market, cost discipline is almost as important to long-term viability than product innovation.

 If there are multiple suitors, a potential bidding war could conceivably drive SanDisk’s final price to close to $20 billion.

 That total would be almost seven times the size of the Beats deal.