That depends on who issued the debt and what happened after that. If WD issued the debt, they could use that incoming cash to pay the old stockholders to gain t

That depends on who issued the debt and what happened after that. If WD issued the debt, they could use that incoming cash to pay the old stockholders to gain the shares in SanDisk. That would be a real cash outflow. Bigger company after the transaction, and bigger debt. Alternative is that WD pays cash to stockholders they might have had lying around. Then issue debt in SanDisk and pay dividend upstream from Sandisk to WD afterwards. Bigger company, and bigger debt result, only different place for the debt. Sometimes tax incentives help which route to choose (private equity often loads up firms on debts, since interest is deductible). Only way to 'pay less' would be (happens sometimes) that you can buy a company that holds a lot of cash, but that has a relatively low valuation one way or the other. Perhaps stockholders sense risks and don't expect dividends (market cap in that sense is expected value of future earnings plus lots of noise). Then you buy company, and use the cash for superdividend right away. Bigger company results, but with relatively stronger solvency since you've paid part from cash that was 'undervalued'.