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Kioxia favours IPO over Western Digital merger offer-paper

TOKYO :Japan's Kioxia Holdings Corp, the world's second-largest maker of NAND flash memory chips, plans to push ahead with an initial public offering (IPO) rather than a stock merger with Western Digital, the Nikkan Kogyo newspaper reported on Friday.

Kioxia is planning to offer its shares in November after a general election in Japan because it believes stock markets will rise after that national poll, the Nikkan Kogyo reported, without citing any sources.

Asked about the report, a spokesperson for Kioxia reiterated previous comments by the company it was considering the appropriate timing for an IPO that it shelved in 2020 amid U.S.-China trade tensions.

Kioxia was acquired for US$18 billion from Toshiba Corp in 2018 by a consortium led by Bain Capital, which declined to comment on Friday. Toshiba retains a 40per cent stake in the chipmaker.

"We are not involved in Kioxia's management and so not in a position to comment," a Toshiba spokesman said. "We continue to consider the most appropriate approach to our investment in Kioxia in order to maximizing shareholder value.

Reuters reported last month that Kioxia was in advanced talks with Western Digital https://jp.reuters.com/article/us-kioxia-holdings-m-a-western-digital-c-idTRNIKBN2FQ1RJ about a possible US$20 billion stock merger with an agreement possible as early as this month, citing a source.

That combination would create a big new company in a consolidating industry. Kioxia earlier declined to comment on that possibility.

Samsung Electronics dominates the market with over a third of NAND sales, according to research firm TrendForce, Kioxia has a nearly 19per cent share and Western Digital 15per cent.

Other large players include South Korea's SK Hynix Inc and U.S. firms Micron Technology Inc and Intel Corp.

Hynix is waiting for approval for a deal to acquire Intel, a regulatory step that any Western Digital-Kioxia agreement would also have to clear.

(Reporting by Chang-Ran Kim, Makiko Yamazaki and Tim Kelly; Editing by Jane Wardell)

Source: Reuters

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