Hitachi is reported to sell their disk drive unit for $4.3 billion to Western Digital. If you know a bit about hard drives, you probably know that these companies are in fact competitors and the news that one company buys another one came with surprise on the market. The news came from L.A. Times. You can read the entire article right here.
Western Digital will pay the transaction with cash and stock. They will give Hitachi $3.5 billion and 25 million common shares, which is said to be worth about $750 million. Hitachi had a closing price of $30.01 on Friday.
Western Digital is the leading company in manufacturing hard drives in the world and it shipped only in the fourth quarter of the last year 52.2 million units in the whole world. The data comes from HIS iSuppli. After Western Digital, the next company which is a larger producer of hard drives is Seagate Technology. 48.9 million drives were shipped by Seagate in the same period and Hitachi shipped 30.3 million drives.
Hitachi Global Storage Technologies is in fact the company which deals with the development of the hard drives, but it is detached from the mother-company, which is Hitachi. This parent company produces more than hard drives, but also televisions and high speed trains, these being made by different branches and divisions of the company.
The CEO of Hitachi Global Storage Technologies is Steve Milligan. By selling the company to Western Digital, he will become a Western Digital employee now. The situation gets repeated, because he is in fact a former Western Digital employee, where he worked as a chief financial officer. He will return to WD, but as a president now. He will report to John Coyne. The companies have both approved the deal and now it is only a matter of time, until the drives created by Hitachi workers will have the signature of Western Digital.
