Today Western Digital disclosed that WD will acquire Hitachi Global Storage Technologies, a part of Hitachi, Ltd., in a definitive agreement. The terms of the agreement list cash and stock value acquired totaling out at about $4.3 billion. The transaction will officially come to a close during Q3 2011.
The terms of the contract say WD will acquire and now own $3.5 billion in cash and $25 million in WD common shares valued at about $750 million. The stock price is based on a March 4 closing stock price of $30.01. Conversely, Hitachi will own about 10 percent in WD shares. WD will wholly support and fund the buyout for approximately $2.5 billion.
In short, this means that Western Digital will likely become one of the dominant storage solution providers in the industry. Your hard drive options from several laptop manufacturers will possibly go from an already small available playing field to an even smaller playing field. WD states otherwise, with president Steve Milligan saying that together the two companies will be able to provide “a diverse set of products and services” and a press release states that the buyout will create broad options for all-around storage.
WD notes that the company will still be based in Irvine, California.
An audio webcast on the announcement will be available via WD’s website and by phone replay.
Telephone dial-in: 888-568-0891 (USA)