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Western Digital to buy Hitachi Global Storage Technologies

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Western Digital (WD) and Hitachi have entered into a definitive agreement whereby WD will acquire Hitachi Global Storage Technologies (Hitachi GST) in a cash and stock transaction valued at approximately $4,3-billion.

The proposed combination will result in a customer-focused storage company, with significant operating scale, strong global talent and the industry's broadest product line-up backed by a rich technology portfolio.
Under the terms of the agreement, WD will acquire Hitachi GST for $3,5-billion in cash and 25-million WD common shares valued at $750 million, based on a WD closing stock price of $30,01 as of 4 March 2011.
Hitachi will own approximately 10% of Western Digital shares outstanding after issuance of the shares and two representatives of Hitachi will be added to the WD board of directors at closing.
The transaction has been approved by the board of directors of each company and is expected to close during the third calendar quarter of 2011, subject to customary closing conditions, including regulatory approvals. WD plans to fund the transaction with a combination of existing cash and total debt of approximately $2,5-billion.
WD expects the transaction to be immediately accretive to its earnings per share on a non-GAAP basis, excluding acquisition-related expenses, restructuring charges and amortization of intangibles.
The resulting company will retain the Western Digital name and remain headquartered in Irvine, California. John Coyne will remain CEO of WD, Tim Leyden chief operating officer and Wolfgang Nickl chief financial officer. Steve Milligan, president and CEO of Hitachi GST, will join WD at closing as president, reporting to John Coyne.
"The acquisition of Hitachi GST is an opportunity for WD to create further value for our customers, stockholders, employees, suppliers and the communities in which we operate," says Coyne."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.
“The skills and contributions of both workforces were key considerations in assessing this compelling opportunity. We will be relying on the proven integration capabilities of both companies to assure the ongoing satisfaction of our customers and to bring this combination to successful fruition."