Western Digital on Monday announced an agreement to buy Hitachi Global Storage Technologies, a wholly-owned subsidiary of Hitachi, Ltd., in a cash and stock transaction valued at approximately $4.3 billion. If approved, Western Digital said the acquisition will create a customer-focused storage company.
John Coyne, president and CEO of Western Digital, said the acquisition of Hitachi GST is a unique opportunity for the company to create further value for its customers, stockholders, employees, suppliers and the communities in which the company operates. Indeed, Western D expects the transaction to be immediately accretive to its earnings per share.
“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,” Coyne said.
From IBM to Western D
Hitachi purchased the majority of IBM’s HDD-related assets for $2.05 billion in 2002, including the transfer of IBM’s HDD-related intellectual property portfolio to the new organization. Hitachi fared well, then, in the disposition of the assets.
When Hitachi acquired IBM’s HDD assets in 2002, it estimated the new company would drive about $5 billion in sales in fiscal year 2003, and would target annual sales of $7 billion by fiscal year 2006.
Coyne highlighted the skills and contributions of both workforces as key considerations in assessing the acquisition opportunity. Western Digital, he said, will be relying on the proven integration track records of both companies to make sure customer satisfaction remains high during the merger and the group ultimately succeeds. The company will offer personal storage and solid state drives for the enterprises, among other products.
“As the former CEO of Hitachi GST, I always believed in the potential of Hitachi GST to become a larger and more agile company,”…