News
 

Bookmark and Share

(4) 

Western Digital and Hitachi on Monday announced that they have entered into a definitive agreement whereby WD will acquire Hitachi Global Storage Technologies (Hitachi GST), a wholly-owned subsidiary of Hitachi in a cash and stock transaction valued at approximately $4.3 billion. The proposed combination will result in the creation of the largest storage company in the world.

Under the terms of the agreement, WD 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 10% 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 closing. 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. WD plans to fund the transaction with a combination of existing cash and total debt of approximately $2.5 billion.

"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. 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," said John Coyne, president and chief executive officer of WD.

WD expects the transaction to be immediately accretive to its earnings per share on a non-GAAP basis, excluding acquisition-related expenses, restructuring charges and amortization of intangibles.

The resulting company will retain the Western Digital name and remain headquartered in Irvine, California. John Coyne will remain chief executive officer of WD, Tim Leyden chief operating officer and Wolfgang Nickl chief financial officer. Steve Milligan, president and chief executive officer of Hitachi GST, will join WD at closing as president, reporting to John Coyne.

"As the former CEO of Hitachi GST, I always believed in the potential of Hitachi GST to become a larger and more agile company. This is a strategic combination of two industry leaders, both growing and profitable. It provides an opportunity for the new company to increase customer and shareholder value and expand into new markets. Additionally, it is important to us that WD shares common values with Hitachi GST to create a more global company that is well positioned to define a broader role in the evolving storage industry," said Hiroaki Nakanishi, the president of Hitachi.

Tags: WD, Western Digital, Hitachi, Hitachi GST, Business, HDD

Discussion

Comments currently: 4
Discussion started: 03/07/11 12:28:16 PM
Latest comment: 03/08/11 01:41:48 AM

[1-4]

1. 
My 2.5" WD Scorpio Blue HDD is a piece of **** compared to my Hitachi Travelstar 5K320 (both are 5400RPM, 8MB cache). I hope WD HDDs will incorporate the technology from Hitachi instead of sticking to their own.
0 0 [Posted by: Martian  | Date: 03/07/11 12:28:16 PM]
Reply

2. 
Aaaw craptacular...

I LIKE Hitachi´s drives.
Oh well lets hope and wish that they do it for a GOOD reason and actually combine the best of both into next generation of drives instead of just trying to get rid of annoying competition.
0 0 [Posted by: DIREWOLF75  | Date: 03/07/11 01:57:57 PM]
Reply

3. 
Oh this is not good, we need more HDD manufacturers, not less. I guess Hitachi realized that buying IBM's HDD division wasn't a good idea, now to sell it to Western Digital? I think if they had to sell, sell it to Toshiba instead! I guess we'd only have SAMSUNG, Seagate and Western Digital left now in the desktop market and SAMSUNG, Seagate, Toshiba and Western Digital in the mobile space....
0 0 [Posted by: deltatux  | Date: 03/07/11 04:45:44 PM]
Reply

4. 
This was all about R&D and patents

Few days ago WD said they don`t want to be in the SSD business now buying Hitachi GST all the hard work has been done for them and now they are a big part of the SSD business.

Job done move on.

Also this is better for us as they will now flood the market with SSD`s which will drive down the price problem with this is companys like OCZ will not have a special product any more with their SSD`s and i`m sure within a year they`ll be saying they will be selling something else instead
0 0 [Posted by: efex  | Date: 03/08/11 01:41:48 AM]
Reply

[1-4]

Add your Comment




Related news

Latest News

Thursday, August 28, 2014

12:22 pm | AMD Has No Plans to Reconsider Recommended Prices of Radeon R9 Graphics Cards. AMD Will Not Lower Recommended Prices of Radeon R9 Graphics Solutions

Wednesday, August 27, 2014

9:09 pm | Samsung Begins to Produce 2.13GHz 64GB DDR4 Memory Modules. Samsung Uses TSV DRAMs for 64GB DDR4 RDIMMs

Tuesday, August 26, 2014

6:41 pm | AMD Quietly Reveals Third Iteration of GCN Architecture with Tonga GPU. AMD Unleashes Radeon R9 285 Graphics Cards, Tonga GPU, GCN 1.2 Architecture

Monday, August 25, 2014

6:05 pm | Chinese Inspur to Sell Mission-Critical Servers with AMD Software, Power 8 Processors. IBM to Enter Chinese Big Data Market with the Help from Inspur

Sunday, August 24, 2014

6:12 pm | Former X-Bit Labs Editor Aims to Wed Tabletop Games with Mobile Platforms. Game Master Wants to Become a New World of Warcraft