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Thursday, Jun 30, 2022

WD Can Integrate $4.8B HGST

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Western Digital Corp. received approval from Chinese regulators to integrate its $4.8 billion acquisition of HGST, the Irvine-based disk maker said this morning.

The nod from China’s Ministry of Commerce came more than three years after Western Digital acquired the San Jose-based unit of Hitachi Ltd. in Japan in its priciest acquisition to date.

The long-waited approval of the March 2012 deal will lead to annual operating expense savings of about $400 million, with additional unknown savings on costs of goods sold, the company said in a statement.

The latest development comes less than a month after Beijing-based Unisplendour Corp. Ltd. paid $3.8 billion for a 15% stake in Western Digital.

HGST specializes in higher-margin corporate storage drives and has made big gains in the growing cloud and solid-state drive segments.

The integration will begin immediately and is expected to continue over the next 24 months.

Under the agreement, Western Digital will continue to offer both HGST and WD product brands and maintain separate sales teams for two years.

Investors seemed to look past the news, sending Western Digital shares up nearly 1% in early afternoon trading to a market value of $18.57 billion.

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