Western Digital to buy Hitachi GST for $4.3 billion

Deal to acquire Hitachi Global Storage Technologies will give WD nearly half of HDD market

Tags: Hitachi Global Storage TechnologiesMergers and acquisitionsWestern Digital Corporation
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Western Digital to buy Hitachi GST for $4.3 billion Western Digital will finance the deal with existing cash and debt of $2.5 billion.
By  Mark Sutton Published  March 8, 2011

Western Digital has announced that it will acquire Hitachi Global Storage Technologies, in a deal valued at $4.3 billion.

The deal will give WD almost half of the total market in hard disk drives, and will give it a stronger presence in the enterprise sector, according to analysts.

WD will purchase Hitachi GST from the Hitachi Ltd holding company, for $3.5 billion cash and 25 million WD common shares, with a value of $750 as of 4th March. This will give Hitachi Ltd around 10% of WD shares, and Hitachi will also gain two seats on the board of WD.

The deal is due to close by Q3 of this year, subject to regulatory approval.

The company will retain the Western Digital name and continue to be headquartered in Irvine, California.

Steve Milligan, president and chief executive officer of Hitachi GST, will join WD at closing as president, reporting to CEO John 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."

"This brings together two industry leaders with consistent track records of strong execution and industry outperformance," said Steve Milligan, president and chief executive officer, Hitachi Global Storage Technologies. "Together we can provide customers worldwide with the industry's most compelling and diverse set of products and services, from innovative personal storage to solid state drives for the enterprise."

Hiroaki Nakanishi, president, Hitachi, Ltd. said, "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."

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