Western Digital CEO Stephen Milligan told CNBC's "Squawk on the Street" on Wednesday the deal is a response to the explosion in data creation in the business world and among consumers, and the attendant need for more storage.
"We want to make sure that we have the broadest set of storage devices in the industry. We want to make sure we've got the best technology, and we want to use that platform to create even more unique devices for our customers and add even more value," he said.
In particular, the acquisition of SanDisk will allow Western Digital to branch out into the solid-state drive business, he said.
The cash-and-stock offer values SanDisk at $86.50 per share, or a total equity value of about $19 billion, using a five-day volume-weighted average price ending on Oct. 20 of $79.60 per share of Western Digital stock.
SanDisk's shares rose more than 2 percent to nearly $77 in trading on Wednesday. Western Digital's shares were up nearly nearly half a percent after initially falling in premarket trading.
Demand for cheaper chips and new products to power Internet-connected gadgets, as well as a push from technology companies to consolidate suppliers, has led to record levels of dealmaking in the semiconductor sector this year.
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The value of the SanDisk acquisition will depend on the closing and approval of an investment from a unit of China's state-backed Tsinghua Holdings, Unisplendour in Western Digital, the companies said.
Milligan said Western Digital is confident it will receive regulatory approval for the Unisplendour deal, but he cautioned it would take some time to work through the process.
The deal is expected to close in the third calendar quarter of 2016.
"We're obviously going to look to close the transaction as quickly as we can," Milligan said, "but right now our current view is that because of the complexity and the size of the transaction, and the interactions that we'll have to have with regulators across the globe, we're targeting that the transaction will be cleared and closed in the third calendar quarter of '16."
— CNBC's Tom DiChristopher contributed to this report.