updated 04:10 am EST, Fri March 9, 2012
WD completes buyout of Hitachi Global Storage
Western Digital has become the world's largest hard drive maker following the completion of its deal to buy Hitachi Global Storage. The deal was sealed with WD paying out $3.9 billion in cash and 25 million shares in WD currently worth just short of $1 billion. The aggregated revenues of the two companies in 2011 totaled $15 billion with the two brands set to continue in the marketplace side by side.
'The completion of this acquisition is a truly momentous event in the 42-year history of our company,' said WD CEO John Coyne. '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...' he added.
The buyout was able to proceed after the FTC ordered WD to transfer a portion of its desktop hard-drive business to competitor Toshiba. Once WD agreed to off-loading certain manufacturing rights and IP to ensure that consumers were protected from any duopoly that might emerge between WD and Seagate, the two market leaders. Hitachi Global Storage now holds 10 percent of WD stock and the right to appoint two members of the WD board.