Western Digital to buy Hitachi's storage arm

Summary:The storage specialist has made a $4.3bn bid for Hitachi Global Storage Technologies, boosting its SSD portfolio to strengthen its position against prime rival Seagate

Western Digital plans to acquire Hitachi Global Storage Technologies, Hitachi's storage subsidiary, in a cash-and-stock deal worth $4.3bn, in a move that should boost its solid-state drive portfolio.

On Monday, the storage specialist announced it will pay $3.5bn in cash and give 25 million common Western Digital shares for San Jose, California-based Hitachi Global Storage Technologies (Hitachi GST). The deal will leave Japanese parent company Hitachi with a 10 percent holding in Western Digital.

Through the deal, Western Digital will gain "enhanced R&D [research and development] 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 company's chief executive John Coyne said in a statement.

In particular, Western Digital will gain access to Hitachi GST's solid-state drive (SSD) technologies, an area where it is trying to compete with main rival Seagate. The Hitachi division's portfolio includes the enterprise-targeted Ultrastar SSD family, launched in November.

Western Digital, based in Irvine, California, started trying to crack the SSD market in 2009, with its acquisition of SSD specialist SiliconSystems. That purchase gave Western Digital its first SSD product range.

The combined businesses will be known as Western Digital and be headquartered in Irvine. The acquisition announcement did not say whether there will be any staff cuts or other reorganisation measures.

Western Digital will fund the transaction with a mixture of cash and a total debt of $2.5bn. The deal has been approved by both boards of directors and is expected to close in the third quarter, subject to regulatory approval.


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Topics: Storage, Tech Industry

About

Jack Clark has spent the past three years writing about the technical and economic principles that are driving the shift to cloud computing. He's visited data centers on two continents, quizzed senior engineers from Google, Intel and Facebook on the technologies they work on and read more technical papers than you care to name on topics f... Full Bio

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