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.