WD has acquired Hitachi GST for $3.5 billion in cash and $750 million in stock.
Leading hard drive manufacturer Western Digital said that it has entered into an agreement with Hitachi Global Storage Technologies (GST) to acquire the latter company for approximately $4.3 billion in cash and stock.
Monday WD said that the resulting acquisition will produce a customer-focused storage company with "significant operating scale, strong global talent and the industry's broadest product lineup backed by a rich technology portfolio." It will also strengthen the company's position in the enterprise market, an area where businesses and consumers are moving their data to cloud-based solutions.
According to the agreement, WD will pay parent company Hitachi Ltd $3.5 billion in cash, and an additional 25 million WD common shares worth $750 million ($30.01 per share) as of March 4, 2011. This means that Hitachi will own around 10-percent of WD shares "outstanding after issuance of the shares." Two Hitachi representatives will also be added to the WD board of directors at closing.
WD said in a press release that the resulting company will retain the Western Digital name and remain headquartered in Irvine, California. John Coyne will remain chief executive officer of WD, Tim Leyden chief operating officer and Wolfgang Nickl chief financial officer. Steve Milligan, president and chief executive officer of Hitachi GST, will join WD at closing as president, reporting to 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."
Once the acquisition is complete, there will only be four key hard drive manufacturers left: Western Digital, Seagate, Toshiba and Samsung. Currently Western Digital is the industry's HDD leader, shipping 52.2 million units in Q4 2010. That will undoubtedly change as tablet adoption gains momentum in the coming years, thus possibly consolidating HDD manufacturers even more.
I hate WD and Love Hitachi!
How could they do this to me!
Quite ironic, I have exactly the opposite sentiments. Never had a WD fail on me, but several Hitachis so far.
I don't like the idea of less competition in the desktop HD space, but with the SSD market growing like wildfire, and tons of competition there, I don't mind it so much. the HD market is dropping rapidly, and sooner or later they'll go down like horse drawn plow makers.
SS storage is the way to go. My main machine has nothing but SSDs (2X 120GB Vertex 2s in a RAID 0 and one 120GB Vertex for old game installations) as of a couple weeks ago. My HD storage (4X 750GB WD Caviar Black in RAID 10) went to my server to retire.
I hope WD reliability doesn't degrade after this merger.
Same feelings... love WD not HT
I hate Hitachi and Love WD!
How could they do this to me!
I second that...the failure rate was so high on Hitachi Deskstars hard drives that they got the name "Deathstars".
They were getting better thought
At this point it still boils down to cost vs benefit. We all recognize the benefit of SSD (I have a 60GB one as my system drive, and it still blows my mind how fast it is), but honestly, who can conveniently afford a set-up such as yours? Not too many, believe me.
Western Digital do sell SSDs, but they don't see a benefit due to high dollar per GB, therefore it's not at the top of their list.
xD
Funny how that works right?
I don't know if this technology has exclusive patent rights to Seagate, but they could consider making the compromise, which is the Seagate Momentus XT Hybrid Drives. Aka 500 GB capacity where 4 GB is Solid State memory for the most loaded files.
But anyway, holy crap though Hitachi being bought out, quite the epic move. Positive note for me, I'm a Western Digital fan myself, but have bought Seagates every now and then also. Both equally good quality-wise. If anything, I have worse luck with Samsung and Hitachi for whatever reason.
WD just went full retard. Guess Samsung Spinpoints will be the last respectably hard drives on the market.