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Western Digital said earlier this month that the European Commission had issued a statement of objections relating to the proposed acquisition by Western Digital Corp. of Hitachi Global Storage Technologies. The Statement of Objections sets out the European Commission’s preliminary assessment regarding the combination of the WD and HGST and its potential effects on competition.

A statement of objections is a preparatory document that does not prejudge the European Commission’s final decision. The issuing of a statement of objections allows recipients to present arguments in response to the European Commission’s preliminary assessment of the competitive effects of a notified transaction. Subject to obtaining the required regulatory approvals or expiration of applicable waiting periods in the European Union and other remaining jurisdictions, the WD expects the transaction to close during the fourth calendar quarter of this year.

After the acquisition of HGST closes, Western Digital Corp. will retain overall market leadership in HDDs. With the takeover of Hitachi GST by WD, the latter's shipments of 203.7 million units, together with Hitachi’s 115.8 million, coalesced to produce total 2010 shipments of 319.5 million, putting owner Western Digital at No. 1 in the HDD space with 50% market share, according to estimates by analysts. Naturally, creation of such a large maker of HDDs is a concern for anti-trust organization, such as the EC.

Seagate Technology’s recent buyout of Samsung Electronics' hard disk drive (HDD) business will considerably boost the newly merged entity’s overall standing, with combined shipments accounting for two-fifths (~40% or 261.2 million) of an HDD market worth 652.4 million units in 2010, according to IHS iSuppli research.

With the completion of the two mergers, the HDD battleground has been effectively whittled down to just three players from five. Left standing far behind in third place is Toshiba/Fujitsu, itself the eponymous product of a merger in 2009. Toshiba/Fujitsu had shipments in 2010 of 71.7 million units, or 10% share of the HDD market.

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

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