Western Digital and SanDisk announced that they have entered into a definitive agreement under which Western Digital will acquire all of the outstanding shares of SanDisk for a combination of cash and stock.

The offer values SanDisk common stock at $86.50 per share or a total equity value of approximately $19 billion. The transaction has been approved by the boards of directors of both companies.

The transaction will be financed by a mix of cash, new debt financing and Western Digital stock. In connection with the transaction, Western Digital expects to enter into new debt facilities totaling $18.4 billion, including a $1.0 billion revolving credit facility. The proceeds from the new debt facilities are expected to be used to pay part of the purchase price, refinance existing debt of Western Digital and SanDisk and pay transaction related fees and expenses. The transaction is expected to close in the third calendar quarter of 2016.

Bank of America Merrill Lynch and J.P. Morgan are acting as lead financial advisors to Western Digital and will provide committed financing for the transaction. Also, Credit Suisse is acting as a financial advisor and providing committed financing, and RBC Capital Markets is providing committed financing.

Cleary Gottlieb Steen & Hamilton and Baker & McKenzie are acting as legal advisors to Western Digital. Goldman Sachs is acting as the exclusive financial advisor to SanDisk. Skadden, Arps, Slate, Meagher & Flom is acting as the exclusive legal advisor to SanDisk.