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Western Digital, the world's second largest maker of hard drives, announced on Monday it has entered into a definitive agreement to purchase Hitachi's HDD division. Under terms of the deal, Western Digital will fork over $3.5 billion in cash and 25 million WD common shares valued at $750 million to purchase its rival. Hitachi will then own about 10 percent of Western Digital, as well as add two members to WD's board of directors.
"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."
Hard drive prices have been falling steadily in recent years, particularly as tablets and other mobile devices that rely on Flash storage rise in popularity. Nevertheless, Western Digital announced HDD shipments of 52.2 million for its second fiscal quarter ended December 31, 2010, up from 49.5 million one year ago.
This acquisition gives Western Digital a chance catch up to market leader Seagate, which WD also tried to buy late last year.
Comments are closed on this article
JamiePeri
July 24, 2011 at 1:49am
I think I am the only one here that has used only Maxtor and after that Seagate HDDs? I had never had any problems with hard disks and I had a lot of them. I don't think that the name badges matter nowadays. I have heard of an energy drink firm that puts the same stuff in all the cheaper energy drinks so who's to say they don't do the same with the HDDs?
Beftus
March 07, 2011 at 2:37pm
Hitachi Buys IBM's Hard Drive Business.
Western Digital Buys Hitachi's Hard Drive Business.
Western Digital tried to buy Seagate's Hard Drive Business.
Maxtor Buys Quantum's Hard Drive Business.
Seagate Buys Maxtor's Hard Drive Business.
What's left in a few years from now?
praetor_alpha
March 07, 2011 at 10:41am
WD is my favorite HD company. I remember that Hitachi bought IBM's drive division (the deathstar drives), and I haven't really liked them due to their fetish with noisy 4/5 platter drives. I'll still be buying WD though.
TMc51
March 07, 2011 at 10:06am
I'm not sure what to think about this. Majority of the Hitachi drives I've ever owned have crapped out, while all of my WD drives are still operational.
D00dlavy
March 07, 2011 at 9:55am
I'm a Hitachi user. Western Digitial is good too. Does this mean WD's product lineup may change?
Not that it matters too much. In eight years we'll all be using devices by Kingston, Intel and OCZ.
deismanj
March 07, 2011 at 9:38am
used to use Who's? WD or Hitachi? I prefer WD Black series HD as I have yet to have one fail, and they have 5 year warranty, VS everyone else and their 3 years... And I've had many a Seagate, Quantum, Maxtor, Hitachi and Samsungs die on me... (but I might be cursed when it comes to hard drives... had multiple, including backups, fail at once more than once...)
