Western Digital to Acquire Hitachi GST

Western Digital to Acquire Hitachi GST

Nachiket Mhatre, Mar 08, 2011 1228 hrs IST

The transaction is valued at approximately $4.3 billion

Western Digital announced that it will acquire Hitachi Global Storage Technologies (Hitachi GST), a wholly-owned subsidiary of Hitachi. The transaction, in cash and stock, is valued at approximately $4.3 billion. The amalgamation is seen as helping the storage major become even more consumer focused by leveraging the expertise and market reach of Hitachi. The resulting company will retain the WD name and remain headquartered in Irvine, California.

"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," remarked John Coyne, president and CEO, WD.

Commenting about the acquisition, Hiroaki Nakanishi, president, Hitachi, said, "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."

After recovering from the initial teething trouble with high capacity drives, Seagate has emerged as a worthy competitor to WD. The assimilation of Hitachi into WD, will give the latter an added edge with a more diverse product portfolio, increased production capacity and better reach and service capabilities. However, only time will tell if the acquisition translates into actual growth for the WD brand.