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WD Acquires Hitachi GST for $4.3 Billion

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.

  • someguynamedmatt
    As long as the Caviar doesn't take on the quality of the Deskstar, I'll be happy. Wouldn't mind having a nice blue PCB on my HDD, though... :D
    Reply
  • TheWhiteRose000
    NOOOOOOO!!!!
    I hate WD and Love Hitachi!
    How could they do this to me!

    Reply
  • burnley14
    TheWhiteRose000NOOOOOOO!!!!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.
    Reply
  • dgingeri
    Since Jan 1, I've had to replace 5 Hitachi Ultrastars, 3 WD RE3s, and 8 Seagate Constellations, all less than 6 months old, all 1TB drives. (They're on loan from our manufacturing side so we can use them for testing, so they have to get returned before they reach 6 months old.) So, I have no real love for Hitachi or WD, but they're better than Seagate.

    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.
    Reply
  • leafblower29
    So it went from IBM to Hitachi to WD. It's interesting to see how companies change so much.
    Reply
  • LordConrad
    I liked Quantum. There was a time when nothing could beat a Bigfoot for single drive storage capacity. Now we've got 2+ TB per drive for storage and SSDs for speed.

    I hope WD reliability doesn't degrade after this merger.
    Reply
  • tpi2007
    This makes some sense, but... has WD also bought some SSD maker too ? They should be...
    Reply
  • zman977
    In my opinion, Western Digital should of acquired a company that makes SSD memory so they could better compete in the SDD market... Just my 2 cents though.
    Reply
  • kewlx
    burnley14Quite ironic, I have exactly the opposite sentiments. Never had a WD fail on me, but several Hitachis so far.Same feelings... love WD not HT
    Reply
  • dormantreign
    NOOOOOOO!!!!
    I hate Hitachi and Love WD!
    How could they do this to me!
    Reply