Toshiba Corp. and Western Digital Corp. have announced that they have entered into a definitive agreement to transfer Toshiba's 2.5" hard disk drive production facilities in Thailand to Western Digital in exchange to some of WD's 3.5" hard drive manufacturing assets in the country.

The asset package covered by the agreement will enable Toshiba to manufacture and sell 3.5" hard drives for the desktop and consumer electronics markets and will enhance its ability to manufacture and sell 3.5" hard drives for near-line (business critical) applications. The divestiture transaction is subject to review by regulatory agencies in certain jurisdictions. Toshiba will transfer the shares of Toshiba Storage Device Thailand (TSDT) to Western Digital and consolidate HDD production at its two HDD manufacturing facilities in the Philippines and a contract manufacturer in China.

Acquisition of TSDT will boost Western Digital's positions on the market of 2.5" hard disk drives and will also allow it to comply to a European Commission requirement to get rid of certain part of its 3.5" HDD manufacturing capacities before acquiring Hitachi Global Storage Technologies (HGST). WD plans to integrate TSDT facilities and employees into its Thailand operations.

Toshiba's acquisition of assets from Western Digital and the transfer of TSDT to Western Digital are subject to Western Digital's completion of its pending acquisition of Hitachi Global Storage Technologies and regulatory approvals from the relevant antitrust authorities.

The financial terms of the two agreements were not disclosed.

Tags: Toshiba, Western Digital, WD, HDD, Business