Western Digital ( WDC ) shareholders approved a $16 billion deal to acquire SanDisk ( SNDK ), creating a formidable competitor in both disk drives and flash-chip storage. “We like the merger,” Monika Garg, an analyst at Pacific Crest Securities, wrote in a research note. “The deal makes strategic sense for both companies. For Western Digital, it removes an overhang from the flash-chip impact on hard disk drives. Western Digital would then own the best flash assets and supply for its solid-state drive business.” SanDisk is a leading provider of chips used for data storage in a wide variety of devices, including smartphones, tablets and PCs. The deal will help SanDisk, which has a strong retail business, to move up the ladder into the enterprise market, where Western Digital is strongest. Western Digital gets the ability to offer chip-based storage in areas where its disk drive technology is losing ground. Western Digital and SanDisk combined had revenue of about $20 billion in 2015. Western Digital is the largest provider of disk drives, ahead of Seagate Technology ( STX ), though the market has struggled as PC sales decline. Western Digital and Seagate have pursued the flash chip market. “This combination brings together two tremendous companies and cultures ideally positioned to capture the growth opportunities in our rapidly evolving industry,” said Steve Milligan, Western Digital CEO, in a statement announcing the deal. China regulators are the last remaining obstacle. China has a say in the transaction, based on Western Digital investments in that country. RBC analyst Amit Daryanani said in a research note that he expects China to approve the deal. More than 90% of votes cast were in favor of approving the issuance of Western Digital stock in connection with the acquisition, Western Digital said. SanDisk said 98% of its shareholders approved the deal. “The combination of SanDisk with Western Digital will enable the combined company to offer the broadest portfolio of industry-leading, innovative storage solutions to customers across a wide range of markets and applications,” said SanDisk CEO Sanjay Mehrotra in a statement . SanDisk shareholders will receive $67.50 in cash and 0.2387 Western Digital share for each share of SanDisk stock. That amounts to about $79 per share, based on Monday’s closing price of $48.19 for Western Digital. The deal was valued at $86.50 a share, or about $19 billion, when it was first announced on Oct. 21. That changed when China’s Unisplendour pulled its plan to make a $3.8 billion investment for a 15% stake in Western Digital on Feb. 23, amid a U.S. government inquiry. By terminating the investment, Unisplendour triggered the alternative deal. Western Digital anticipates seeing $500 million in total cost synergies, not including tax savings, from the acquisition. Institutional Shareholder Services, a leading independent proxy advisory firm, issued a report on Feb. 29 recommending Western Digital shareholders approve the deal and said the transaction could attain $1.1 billion in cost synergies within 12 months of closing. Shares of Western Digital and Seagate were down 1.5% each in midday trading in the stock market today , near 45 and 76, respectively. Needham analyst Richard Kugele said in a research note that the focus will now quickly shift to Western Digital being able to “streamline two organizations and extract synergy savings while maintaining the strong cash flow of the traditional core to finance the debt.” Kugele has a strong buy on Western Digital stock, with a price target of 90. He said flash-based storage systems are proving critical for the front end of data centers, and increasingly serve as primary storage.