Western Digital's Deal to Acquire Hitachi's HDD Business Approved

Western Digital has just secured conditional approval from the European Union's competition regulator to purchase Hitachi's hard disk drive business for a grand total of $4.3 billion. This was only made possible, however, after Western Digital agreed to sell several of its production operations.

Western Digital, which just so happens to be the world's second largest competitor in the hard disk drive (HDD) sector, and Hitachi, which just so happens to be the third largest, unveiled the deal back in March. The deal itself is aimed at giving the United States company a competitive edge in developing next-generation information storage technology.

This decision by the European Commission confirmed a story published last week by Reuters. According to European Union Commissioner Joaquin Almunia in a recent statement, "The proposed divestiture will ensure that competition in the industry is fully restored before the merger is implemented."

Western Digital did promise to sell essential production assets for the manufacturer of 3.5" disc drives, including a production plant, according to the Commission, which cited reduced competition in the sector after Seagate Technology bought Samsung Electronics' hard disk drive business recently. In addition to that the company agreed to transfer or license intellectual property rights to the business to be sold off. What's more is that Western Digital will also transfer staff and the supply of HDD components to the unit.

Western Digital is unable to complete the deal until it finds an appropriate buyer for the unit, which will then need to be approved by the regulator, according to the commission. If Western Digital is unable to find a suitable buyer, it stands to reason that this deal, although approved, will never actually come to fruition, which could be disappointing for both companies.

Source: Reuters - Western Digital cleared to buy Hitachi disk drive business

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Hitachi GTS Acquired by Western Digital for $4.3 Billion

Every now and then in the computer world we actually do hear about things that do not involve Apple or anything Apple related. It is rare, yes, but it does happen. One such instance is that Western Digital, a company known for their hard drives, has officially bought out Hitachi GST for a pretty $4.3 billion.

That's right, on Monday Western Digital told media outlets that they were buying Hitachi Global Storage Technologies for the equivalent of $4.3 billion. There were different things that comprised the entire deal which included a combination of $3.5 billion in cash with the addition of shares in the total amount of $50 million. Full terms of the deal included Western Digital's name remaining the same for the company and Hitachi GST CEO Steve Milligan joining Western Digital as President.

CEO of Western Digital John Coyne argued to media sources that the move was primarily for scale. Western Digital and Hitachi Global Storage Technologies would form a larger competitor company and would also have the advantage of better research as well as a wider range of products as Hitachi has focused primarily on fields like drivers for set-top boxes and a greater focus on mobile hard drives.

This move is an attempt by Western Digital to hedge their position and compete against a market that gets increasingly tougher each day. Hitachi has suffered with reduced influence whereas Western Digital has been battling it out with fellow American rival company Seagate. Western Digital's acquisition of Hitachi GST gives the company a improved position in the competition.

Source: Electronista - Western Digital to snap up Hitachi GTS for $4.3 billion

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