Irvine-based hard-drive maker Western Digital (WD) plans to acquire Hitachi Global Storage Technologies in a cash-and-stock deal worth $4.3 billion. The deal is expected to result in the industry's "broadest" product portfolio, among other benefits, according to WD.
San Jose-based Hitachi Global Storage Technologies (GST) is a subsidiary of Hitachi Ltd. and develops advanced hard-disk and solid-state drives, as well as other external storage products. WD designs and produces hard drives and solid-state drives aimed at securing users' data and easily accessible. The company reported revenue of nearly $2.5 billion in its second fiscal quarter.
Under the deal, WD will acquire Hitachi GST for $3.5 billion in cash and 25 million common shares valued at $750 million. Both companies' boards have approved the acquisition, which is expected to close in the third quarter.
"The acquisition of Hitachi GST is a unique opportunity for WD to create further value for our customers, stockholders, employees, suppliers and the communities in which we operate," said John Coyne, president and CEO of WD. "We believe this step will result in several key benefits – enhanced R&D 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 skills of both companies' work forces also played a part in the decision, said Coyne, who will remain CEO of WD. Hitachi GST President and CEO Steve Milligan will join WD once the deal closes. He will report to Coyne.
"This brings together two industry leaders with consistent track records of strong execution and industry outperformance," said Milligan. "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."
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