The buyout values SanDisk's stock at about $86.50 per share, a 15 percent premium to Tuesday's closing price.
If a previously announced investment in Western Digital from Unisplendour closes prior to the acquisition, Western Digital will pay $85.10 per share in cash and 0.0176 shares of its stock per share. If not, the price will be $67.50 in cash and 0.2387 shares for each share of SanDisk Corp.
The boards of both companies have approved the deal, which is targeted to close in 2016's third quarter. It still needs approval from SanDisk shareholders.
Shares of Western Digital Corp. dropped more than 3 percent in premarket trading Wednesday. Shares of SanDisk gained more than 5 percent.