Print 31 comment(s) - last by Souka.. on Mar 8 at 3:20 PM

Dealis subject to regulatory approval

Western Digital is one of the largest firms in the traditional hard drive manufacturing realm. Other notable companies in the HDD market include Hitachi GST and Seagate. Western Digital has announced that it has entered into an agreement to purchase Hitachi GST and combine its operations.

The deal was announced today and will cost WD about $4.3 billion. The transaction will be paid with $3.5 billion in cash and 25 million WD common shares valued at about $750 million. Hitachi will also get to place two representatives on the WD board of directors. The stock will mean that Hitachi Ltd will own about 10% of all outstanding WD stock.

The deal still has to get regulatory approvals and is subject to other customary closing conditions as well. WD will take out $2.5 billion in new debt to pay the cash portion of the deal. According to WD, it expects the purchase to immediately start contributing to its earnings per share on a non-GAAP basis after excluding the acquisition expenses, restructuring charges, and other costs.

The merged companies will continue to operate under the Western Digital brand and will continue to be headquartered in Irvine, California. WD CEO will remain John Coyne and the COO will be Tim Leyden with Wolfgang Nickl as CFO. There are no changes in the WD senior staff. Hitachi GST president and CEO Steve Milligan will move to WD as president reporting directly to CEO Coyne.

"The acquisition of Hitachi GST is a unique opportunity for WD to create further value for our customers, stockholders, employees, suppliers and the communities in which we operate," said John Coyne, president and chief executive officer of WD. "We believe this step will result in several key benefits-enhanced R&D capabilities, innovation and expansion of a rich product portfolio, comprehensive market coverage and scale that will enhance our cost structure and ability to compete in a dynamic marketplace. The skills and contributions of both workforces were key considerations in assessing this compelling opportunity. We will be relying on the proven integration capabilities of both companies to assure the ongoing satisfaction of our customers and to bring this combination to successful fruition."

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

RE: Less companies, less competition
By dice1111 on 3/7/2011 11:09:18 AM , Rating: 3
Until the rotating drive slowly get phased out in favor of SSD's as they become more affordable and larger in capacity.

It seems everyone and their grandma is getting into that market.

It may take a while but competition will be large & demand will increase and it will be a great thing for consumers.

Demand for HDD’s will shrink and the market will become unprofitable. Maybe Hitachi sees the light?

RE: Less companies, less competition
By mindless1 on 3/7/2011 2:51:41 PM , Rating: 2
Consumers are increasing their storage needs faster than SSD capacity increases and in fact there are not enough flash chips made (after mobile devices get the lion's share) to replace HDDs in the near future.

That "someday" this will change, is not a reason to get out of the business now. For example there are still ICE automobiles made, yes?

By someguy123 on 3/7/2011 6:11:36 PM , Rating: 2
automobiles haven't advanced nearly as quickly as computing technology, and aren't nearly as "easy" to replace.

I believe there's a quote on this site that says something like "If cars advanced like computers, we'd be getting 100,000MPG and they would explode at random about once a year."

"Folks that want porn can buy an Android phone." -- Steve Jobs

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki