Western Digital Corp. has closed its buy of Hitachi Global Storage Technologies Inc. for $4.8 billion, positioning the Irvine-based company to battle for the top position among drive makers.
The cash and stock buy is about $500 million more than originally anticipated. The price is based in part on the March 7 price for 25 million shares of Western Digital common stock included in the deal, which upped the overall purchasing price.
Hitachi will go under the name of its holding company, Viviti Technologies Ltd., and continue selling brands and products under that moniker.
Japan-based Hitachi Ltd. now owns roughly 10% of Western Digital’s outstanding shares and has the right to designate two members to its board.
John Coyne will retain the chief executive title, and former Hitachi head Steve Milligan will take on the president role.
Tim Leyden will remain chief operating officer and Wolfgang Nickl will retain the chief financial officer position.
The deal marks a significant milestone in Western Digital’s history of more than four decades in Orange County.
“The completion of this acquisition is a truly momentous event in the 42-year history of our company,” Coyne said. “We have acquired a strong presence in the traditional enterprise market, substantially increased our presence in the industry's fastest-growing segments−cloud and mobility−and improved our capability to address new market initiatives such as enterprise solid state drives, storage solutions for small business and low-profile hard disk drives and hybrid drives for Ultrabooks.”
Western Digital and Hitachi GST combined for about $15 billion in revenue in 2011.
The acquisition was set to make Western Digital the undisputed leader in drives but widespread floods that devastated large areas throughout Thailand have made that unlikely.
Thailand is the world’s second-largest producer of disk drives, behind China, and also a major supplier of hard drive components. Western Digital ships about 60% of its disk drives from Thailand, where it has 37,000 employees.
Cupertino rival Seagate Technology LLC overtook Western Digital in disk drive unit sales in the fourth quarter, ending a title Western Digital maintained for more than two years.
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.
Western Digital’s priciest acquisition to date took exactly a year to finalize as antitrust concerns from U.S. and international regulators threatened to derail the acquisition if Western Digital didn’t make concessions.
It sold off its business of 3.5-inch hard disk drives earlier this week to Toshiba Corp., clearing a major regulatory hurdle.
The divestiture also included the transfer or licensing of intellectual property rights, the transfer of personnel, and supply of certain disk drive components.
As part of the deal, Western Digital will acquire Toshiba Storage Device Company Ltd. in Thailand, which hasn’t regained its hard drive manufacturing operation since heavy flooding late last year damaged many regions in the country.
Financial terms of the Toshiba deals were not disclosed.