Western Digital to Acquire Hitachi GST for $4.3B
IRVINE, Calif. — Western Digital, the largest maker of computer hard-disk drives, announced on Monday it will acquire rival Hitachi Global Storage Technologies (Hitachi GST) of San Jose, Calif., for $4.3 billion in cash and stock.
Western Digital will pay $3.5 billion in cash and 25 million of its shares to Japanese parent Hitachi Ltd. The deal will give Hitachi a 10-percent stake in Western Digital along with two seats on the company’s board of directors.
The acquisition, which has been approved by the boards of both companies, is expected to be completed during the third quarter.
“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,” John F. Coyne, president and CEO of Western Digital, said in a statement. “The skills and contributions of both workforces were key considerations in assessing this compelling opportunity.”
The combined company will maintain the Western Digital name and be headquartered in Irvine, Calif. Coyne will remain the CEO. The current chief of Hitachi Global Storage, Steve Milligan, will be the president.
“This brings together two industry leaders with consistent track records of strong execution and industry outperformance,” Milligan said in a statement. “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.”
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