Western Digital to buy Hitachi hard drive unit

Mar 7, 2011, 21:01 GMT

San Francisco - Western Digital, the world's leading maker of computer hard drives, is to buy rival Hitachi's hard drive unit for 4.3 billion dollars, the companies said Monday.

Western Digital will pay 3.5 billion dollars in cash and 25 million common shares, worth about 750 million dollars based on its 30.01 dollars closing price on Friday, for Hitachi Global Storage Technologies.

The deal would result in 'significant operating scale, strong global talent and the industry's broadest product lineup backed by a rich technology portfolio,' the companies said in a statement.

The move comes as the hard drive sector faces tumultuous times as flash drives, optical drives and cloud-based services offer competing technologies to the traditional spinning magnetic disks for storing digital data.

News of the deal sent Western Digital's shares up 19 per cent in New York trading Monday, while shares of main rival Seagate also climbed sharply as investors welcomed the consolidated in the industry.

With the acquisition Western Digital will now enjoy a 49-per-cent market share, compared to Seagate's 29 per cent.

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