Japanese Regulators OK Western Digital’s Hitachi Global Storage BuyWednesday, December 28, 2011
Japan’s regulatory agency that oversees mergers and acquisitions on Wednesday approved Western Digital Corp.’s pending buy of San Jose-based Hitachi Global Storage Technologies Ltd.
The Japan Fair Trade Commission in its ruling said “competition in any particular field of trade might not be substantially restrained” after Western Digital shed some assets, quelling antitrust concerns.
Japan’s approval clears another big regulatory hurdle for the Irvine-based company’s pending $4.3 billion deal for Hitachi, which was set to make Western Digital the undisputed leader in drives.
Recent troubles in heavily flooded Thailand, where Western Digital produces 60% of its hard drives, have cast some doubt on that likelihood.
The latest approval comes two days after China raised antitrust concerns over the pending buy and less than two weeks after Hiroaki Nakanishi, president of Japan-based Hitachi Ltd., parent of Hitachi Global Storage, voiced concerns about further delays in the planned sale.
Hitachi said it postponed the sale after a European Commission said it needed more time to assess the deal, which originally was expected to close in the fourth quarter.
The deal has been pushed back to at least March and possibly beyond, according to Hitachi.
In late November, Western Digital agreed to a series of conditions to gain approval from the EU, including selling off its business of 3.5-inch hard disk drives, including a production plant and related assets.
The divestiture would also include the transfer or licensing of intellectual property rights, the transfer of personnel, and supply of certain disk drive components.
Hard-disk drives store and allow access to data. Western Digital’s disk drives go into computers, external storage devices, corporate networks and consumer electronics such as DVR players.
Seagate offered $1.4 billion for Samsung Electronics Co.’s disk drive business in April. The EU commission recently approved that deal.
China approved Seagate’s acquisition earlier this month after the companies reached an agreement aimed at maintaining competition.
Western Digital shares are down more than 2% in midday New York trading, to a market value of about $7.1 billion on a broadly down day on Wall Street.