WD Acquires Hitachi Global Storage Technologies (GST) [ Edited ]

[ThePizzaMatrix]

Hey guys/gals!! I was looking for a review on Tom's Hardware and just saw this article, so I wanted to share it so we can discuss it:

WD Acquires Hitachi GST for $4.3 Billion

Leading hard drive manufacturer Western Digital said that it has entered into an agreement with Hitachi Global Storage Technologies (GST) to acquire the latter company for approximately $4.3 billion in cash and stock.

Monday WD said that the resulting acquisition will produce a customer-focused storage company with "significant operating scale, strong global talent and the industry's broadest product lineup backed by a rich technology portfolio." It will also strengthen the company's position in the enterprise market, an area where businesses and consumers are moving their data to cloud-based solutions.

According to the agreement, WD will pay parent company Hitachi Ltd $3.5 billion in cash, and an additional 25 million WD common shares worth $750 million ($30.01 per share) as of March 4, 2011. This means that Hitachi will own around 10-percent of WD shares "outstanding after issuance of the shares." Two Hitachi representatives will also be added to the WD board of directors at closing.

WD said in a press release that the resulting company will retain the Western Digital name and remain headquartered in Irvine, California. John Coyne will remain chief executive officer of WD, Tim Leyden chief operating officer and Wolfgang Nickl chief financial officer. Steve Milligan, president and chief executive officer of Hitachi GST, will join WD at closing as president, reporting to John Coyne.

"The acquisition of Hitachi GST is a unique opportunity for WD to create further value for our customers, stockholders, employees, suppliers and the communities in which we operate," said John Coyne, president and chief executive officer of WD. "We believe this step will result in several key benefits-enhanced R&D capabilities, innovation and expansion of a rich product portfolio, comprehensive market coverage and scale that will enhance our cost structure and ability to compete in a dynamic marketplace."

Once the acquisition is complete, there will only be four key hard drive manufacturers left: Western Digital, Seagate, Toshiba and Samsung. Currently Western Digital is the industry's HDD leader, shipping 52.2 million units in Q4 2010. That will undoubtedly change as tablet adoption gains momentum in the coming years, thus possibly consolidating HDD manufacturers even more.

Link: http://www.tomshardware.com/news/wd-acquires-hitachi-hdd-ssd-harddrive,12335.html

So... Just like Seagate purchased Maxtor, WD just purchased Hitachi!!

What do you think will be the results? What can we expect? Hybrid drives? Market expansion? New types of products? So many possibilities.... 

On the other hand, what could be the negative part of this merging? o.O  

[ThePizzaMatrix]

Anyone? O.o I was expecting signs of human life u_u

[TonyPh12345]

We use literally TONS of Hitachi Enterprise spindles in our data centers.... It will be interesting to see what this means in the long term!!

[RoofingGuy]

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TonyPh12345 wrote:
It will be interesting to see what this means in the long term!!

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I think it means you're paying Guy's salary, now.

[ThePizzaMatrix]

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RoofingGuy wrote:

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TonyPh12345 wrote:
It will be interesting to see what this means in the long term!!

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I think it means you're paying Guy's salary, now.

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You for for Hitachi? o.o

[Joe_S]

It will depend on why WD bought them and how they have managed past pruchases. Sometimes compaines just want a certain area of the business. Other times they want to just stifle competition. Other companies like I just retired from have a history of acquiring a company and running it into the ground squeezing out all they can and sell it off or close it.

Joe

[ThePizzaMatrix]

I have a company on mind that does that, Joe....

But yes, WD's goal should be made clear into why they decided to get Hitachi......