Western Digital on Thursday completed the acquisition of the hard drive business of Hitachi, and set up two subsidiaries with separate brands and products, to meet the conditions of antitrust regulators.
The company said in a statement late Thursday that it completed the acquisition of Viviti Technologies, formerly Hitachi Global Storage Technologies, effective March 8 for $3.9 billion in cash and 25 million shares of its common stock valued at about $0.9 billion.
Hitachi now owns 10 percent of Western Digital’s shares outstanding. Western Digital has paid about $392 million more in cash as part of an amendment to the purchase agreement. Western Digital will operate with WD Technologies and HGST as wholly-owned subsidiaries, with total revenue in 2011 of $15 billion.
“Similar to successful multi-brand models in other industries, the two subsidiaries will compete in the marketplace with separate brands and product lines while sharing common values of customer delight, value creation, consistent profitability and growth,” Western Digital said.
Western Digital announced the proposed acquisition in March last year. But its completion was delayed largely because of the need for regulatory clearances, amid concerns that the acquisition could reduce competition in the hard drive market in the wake of plans by Seagate Technology to acquire the hard disk drive (HDD) business of Samsung Electronics.
China’s Ministry of Commerce approved recently the Western Digital acquisition, but put the condition that the Hitachi unit operate independently for at least two years after the acquisition, citing concerns that the deal would weaken competition in the market.
Western Digital did not immediately respond to a request for comment.
“We are pleased with the operating model for WD—a model that has proven successful in other industries, where companies with scale and multiple competing brands deliver strong financial performance by creating customer and shareholder value,” it said in a statement with supplemental information for investors.
( i hope they make better enclosures of the drives than they do now, as i love Hitachi drives but not Western Digital )
see the rest of the story here
related story on Seagate purchasing Samsung HDD business here
originally posted in Macworld news.
it’s a changing world here