Western Digital Corporation has agreed to acquire the memory chip maker SanDisk Corporation in a cash and stock deal that is worth about $19 billion. The companies agreed to the deal on Wednesday.

Under the terms of the deal, the investors of SanDisk would receive $86.50 a share in cash and stock for each of the shares they hold. This represents a 15 percent premium to SanDisk's closing price on Tuesday, according to The New York Times.

"This transformational acquisition aligns with our long-term strategy to be an innovative leader in the storage industry by providing compelling, high-quality products with leading technology," Stephen D. Milligan, the Western Digital chief executive.

SanDisk rose 1.9 percent to $76.62 at 9:48 a.m. Wednesday in New York. Western Digital was little changed at $74.97. SanDisk is one of the largest makers of Nand flash memory chips, which store data in mobile devices and are now being increasingly fitted into computing hard drives. The technology that SanDisk uses is power efficient and also makes it faster to access information, which makes it a great advantage when it comes to cloud computing.

While Western Digital home market is shrinking, the company once had a leading market share of about 44 percent in 2014, according to Bloomberg Business.

The deal is expected to draw intense scrutiny from both U.S. and Chinese regulators as accusations of cyber snooping increase between the two countries. SanDisk may also need Toshiba Corp's approval to consummate the deal, as it uses the Japanese conglomerate's foundries for making chips, apart from having an important intellectual property-sharing joint venture. The joint venture with Toshiba will be on-going, announced SanDisk and Western Digital.

If the deal does go through, it should add to Western Digital's adjusted earnings within the first 12 months of closing, according to Reuters.