Kioxia Contacts JIC Fund for Support on Western Digital Merger

Kioxia Holdings Corp., a Japanese semiconductor company, is reportedly contacting Japan Investment Corp. (JIC), a state-backed investment fund, to seek external support for its planned merger with Western Digital Corp.

The two companies are nearing an agreement on a deal that would involve spinning off Western Digital's NAND flash memory business and merging it with Kioxia to create a new company. Kioxia's lenders are working to submit commitment letters as soon as Friday to help broker a deal, according to people familiar with the matter.

The sources also said that the two companies are seeking to conclude negotiations this month and are expected to announce relevant transaction content no later than when Western Digital announces its results on October 30.

It is unclear how much funding Kioxia is seeking to obtain from JIC, nor is it clear whether JIC will actually support the merger. None of the three companies have responded to requests for comment.

The details of the merger are still confidential, but sources say that Western Digital shareholders will control slightly more than half of the shares of the new company after the merger.

The merger of Kioxia and Western Digital would create the world's largest flash memory company, with a combined market share of over 30%. The deal is seen as a way for the two companies to compete more effectively with South Korean rivals Samsung Electronics and SK Hynix.

However, the merger has also raised some concerns, including the potential for job losses and the impact on competition in the flash memory market. Regulators in the United States and China are expected to scrutinize the deal closely.

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