WD has started the process of acquiring Hitachi Global Storage Solutions as of today.
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 March 4, 2011.
Now, obviously this will be a tremendous boost for Western Digital in long term once they are officially done with the process:
“We believe this step will result in several key benefits with enhanced RnD 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”.
The process seems as if its already started, as Hikoki Nakanish, Hitachi Co. Ltd’s President addressed via press release by saying “As the Former CEO of Hitachi GST”. 2 storage giants merged as one? That’s one hell of a bold and expensive move by Western Digital and it will bear fruits for the company and for consumers. Storage industry never ceases to amaze me yet. For those who do not know, its been few months ago where Hitachi received “Design and Engineering award” at the CES Innovations 2011 for their LifeStudio Mobile Plus lineup.
I still remember during the Anand Shimpi meetup where he said that back in his days there are many companies and now its just handful of them who are acquiring other companies. Hitachi’s storage business itself is a huge business in its own respect and Western Digital will benefit from its RnD and product lineup+ expertise and other resources.