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Tuesday, 08 March 2011 10:34

WD aquires Hitachi Global Storage Technologies

Written by Rob Squires

$4.3 billion
Western Digital and Hitachi, announced that that they have entered into an agreement where Western Digital will acquire Hitachi Global Storage Technologies.  The deal is valued at approximately $4.3 billion.

Western Digital will acquire Hitachi GST for $3.5 billion in cash and 25 million WD common shares valued at $750 million, based on a WD closing stock price of $30.01 as of March 4, 2011. Hitachi will own approximately ten percent of Western Digital shares outstanding after issuance of the shares and two representatives of Hitachi will be added to the WD board of directors at the closing of the deal.

The transaction has been approved by the board of directors of each company and is expected to close during the third calendar quarter of 2011, subject to customary closing conditions, including regulatory approvals. Western Digital plans to fund the transaction with a combination of existing cash and total debt of approximately $2.5 billion.
The resulting company will retain the Western Digital name  and will also remain headquartered in Irvine, California. 

John Coyne will remain chief executive officer of Western Digital, Tim Leyden chief operating officer and Wolfgang Nickl chief financial officer. Steve Milligan, president and chief executive officer of Hitachi GST, will join Western Digital at the completion of the deal as president, reporting to John Coyne.

Last modified on Tuesday, 08 March 2011 11:05

Rob Squires

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-3 #1 East17 2011-03-08 12:03
3.5 billion ?!?! WTF ? I mean .. why would you spend soooo much cash in a cash deprived economy? And spending it on a company instead of R & D when you clearly need improvements in the R & D department ... Not because WD's products lack R & D but because the market just got so much more competitive with competition from Hybrid drives and SSDs.
+9 #2 thetruth 2011-03-08 12:27
Quoting East17:
3.5 billion ?!?! WTF ? I mean .. why would you spend soooo much cash in a cash deprived economy?

Times move on, businesses depreciate in recessions, it's a good time to acquire rivals. They will acquire the entire company, which happens to include all of the R & D that Hitachi has. Would did you expect them to do in an economic downturn? Stash their money and hope that their business continues to prosper?
+2 #3 Kob 2011-03-08 12:37
Shocking news.
For the last 5 years it was only Hitachi for me - I've considered their enterprise drives to be the best (I use them for my personal computers - never fully trusted their consumer drives for my dearly beloved data). Never wanted to touch WD due to bad stories from people using them a few years ago. Seagate is also out due to the fiasco they had with the 1TB and 1.5TB a couple of years ago and refusing to acknowledge it for a very long time.
0 #4 robert3892 2011-03-08 14:05
It will be interesting to see if the EU agrees to the merger. That would leave WD and Seagate as the only major mechanical HD manufacturers
+1 #5 The_Wolf88 2011-03-08 14:56
They bought Hatachi already :o !

I thought it will take more time not in just a week !
+10 #6 AndreiD 2011-03-08 15:43
WD will get their money back in a couple of years. They're now the biggest HDD company out there and they will be even more profitable with this acquisition.
Hitach has a quite sizable share of the enterprise market and I think that's what WD was looking for.
Right now, there are 4 big HDD manufacturers left, WD, Seagate, Samsung and Toshiba (Toshiba only does 2.5 inch HDDs though).
I for one prefer Samsung HDDs because I haven't had any unpleasant experiences with them.

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