Western Digital is buying Hitachi’s hard drive unit, Hitachi Global Storage Technologies, in a $4.3bn cash and stock deal.
Touted as one of the biggest mergers in the hard disk industry’s history, the deal gives the combined companies about 49% of the worldwide hard drive market. Competitor Seagate has less than a third of the market.
In terms of units sold, Western Digital is the top hard drive maker, ahead of Seagate, with Hitachi at the third position. Toshiba/Fujitsu and Samsung are the other players with around 10% of the market each.
By acquiring Hitachi’s unit, Western Digital is buying one of the last key players in data storage technology.
However, Western Digital president and chief executive John Coyne has told teh Financial Times that the deal will not kill competition as the remaining three competitors are very large and capable.
The deal is expected to strengthen Western Digital’s position in the growing enterprise market as well.
Hitachi Global Storage Technologies president and chief executive officer Steve Milligan said, "Together we can provide customers worldwide with the industry’s most compelling and diverse set of products and services, from innovative personal storage to solid state drives for the enterprise."
After the acquisition, which is approved by the board of both the companies, Hitachi will own about 10% of Western Digital. Hitachi Global Storage president and CEO Steve Milligan will join Western Digital and report to Coyne.
The deal is expected to close in the third quarter.
