SanDisk Corp., the world's biggest maker of removable flash memory, is buying Israeli competitor msystems Ltd. in an all-stock deal worth about 1.55 billion dollars.
SanDisk said late Sunday the takeover of msystems, which specialises in flash memory that stays embedded in mobile telephones and other devices, would broaden its product mix.
"This strategic acquisition will give us the critical mass and complementary products, customers, channels, technology and manufacturing base to take our shared vision to the next level," SanDisk chief executive Eli Harari said.
SanDisk's own focus is on portable storage cards for products including computers and digital cameras.
The companies hope to close the deal in the fourth quarter of this year, subject to regulatory approval and agreement by the Israeli courts.
Each msystems ordinary share will be converted into 0.76368 of a share of SanDisk common stock, representing a 26-percent premium over the average closing price of msystems' shares for the last 30 trading days.
In late afternoon trade on the Nasdaq exchange, msystems shares rocketed 4.14 dollars (13.02 percent) to 35.93. SanDisk stock fell 59 cents (1.25 percent) to 46.55 dollars.
