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Samsung says mulling SanDisk options

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Samsung Electronics Co Ltd said it was considering “various opportunities” regarding SanDisk, in response to reports it was interested in bidding for the US flash memory maker.

“We are looking at various opportunities regarding SanDisk, but nothing has been decided yet,” James Chung, a spokesman for Samsung, told Reuters.

Shares in SanDisk have tumbled since mid-May, when they reached a recent peak just above $33. The stock closed at $13.46 on Thursday, for a total market value of $3.2 billion according to Reuters Knowledge.

Online news provider eDaily said Samsung, the world's top maker of memory chips, was interested in acquiring SanDisk, whose shares have tumbled amid a steep downturn in the memory market. It said Samsung had retained JPMorgan as an advisor.

Samsung, which is the world's top maker of NAND flash chips and pays SanDisk 400 billion won ($353.8 million) a year in licensing fees, is looking at reducing that expense through the acquisition, eDaily also reported.

Analysts said an acquisition of SanDisk could pay off for Samsung, which has been struggling with steep price drops in NAND flash memory chips, used in storage devices and digital gadgets.

“Although SanDisk and (world No. 2 flash maker) Toshiba are partners, there are doubts as to whether SanDisk will continue to invest (in their venture),” said James Song, an analyst at Daewoo Sec. “So in the medium to long term, Samsung would be able to gain more control over the flash market.”

“By acquiring SanDisk, Samsung could also reduce expenses related to royalties, and also use SanDisk's marketing presence to establish itself in the flash-based computer market.”

Others were more doubtful of any immediate impact a purchase could have.

“As long as Toshiba manages the output (at the two companies' NAND lines), even if Samsung becomes largest shareholder in SanDisk it would have no impact on supply,” said Park Hyun, an analyst at Prudential Investment and Securities.

SanDisk, widely known for its memory storage cards, in August was the subject of speculation that computer storage drive maker Seagate Technology Inc could be interested in buying all or part of it. (Reuters)

 

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