Western Digital (NASDAQ:WDC) stock rose in pre-market trade Monday after a media report said that Kioxia Holdings Corp has a renewed interest in merger.
According to the Kyodo newswire, Bain Capital has reopened discussions with SK Hynix to facilitate a potential merger between memory chip manufacturers Western Digital and Japan's Kioxia Holdings.
The prospect of these two companies potentially consolidating is being viewed favorably by analysts. The merger talks broke down last October as SK Hynix was against the deal.
“While WDC splitting into two separately trading equities is a positive catalyst,” a merger “would be an even bigger catalyst,” Loop Capital analysts said in a note.
A merger between Western Digital and Kioxia Holdings Corp. could create a stronger entity in the computer hardware and storage industry, leading to operational efficiencies and a more robust market presence.
“We would see a combination of WDC and Kioxia as positive for all parties involved,” analysts added, as “consolidation should yield better longer-term market dynamics benefiting investors in Kioxia and WDC.”
WDC was up 1.5% in early Monday trade.