European Union Clears Western Digital to Buy Hitachi's Hard Drive Division

Posted 11/23/2011 at 8:07am | by Paul Lilly

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The European Union is notorious for being sticklers when it comes to how companies do business and is ever watchful for what it perceives to be a potential monopoly. Concerns aside, the EU just granted approval to Western Digital, the world's second largest hard drive maker, to purchase Hitachi's HDD business for $4.3 billion, with Hitach being the third biggest player in the HDD market.

"The proposed divestiture will ensure that competition in the industry is fully restored before the merger is implemented," EU Commissioner Joaquin Almunia said in a statement, according to Reuters.

Certain conditions must be met before Western Digital is allowed to proceed. For example, the EU made Western Digital pinky swear to sell off several production assets related to 3.5-inch drive manufacturing. Among those assets is a production plant that must have a buyer before the deal can go through. Western Digital will also transfer or license intellectual property rights to the business to be sold off, as well as transfer staff and HDD components, Reuters reports.