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Mergers and Acquistions News

Categories: Hardware

March 7th 2011, 17:04PM

Western Digital (WD), one of the largest makers of hard-disk drives in the world, says it will acquire Hitachi Global Storage Technologies (Hitachi GST), a subsidiary of the electronics giant, in a deal valued at approximately $4.3 billion (£2.6 billion).

Hitachi will receive $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 also own about ten per cent of WD and have two of its staff on the board.

WD expects to use a mixture of existing cash and debt of around $2.5 billion to fund the transaction, which it says will create a more customer-focused firm with larger operating scale and global reach.

"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.

Given the current uncertainty of the hard-disk segment, the deal represents what is effectively consolidation on Hitachi's part as it looks to expand in other areas. Disk drives are losing ground to alternatives like flash drives that are smaller and faster.

The transaction is expected to close during the third quarter of 2011.ADNFCR-1833-ID-800447067-ADNFCR

 

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