Western Digital has closed a $4.1 billion deal to acquire Viviti Technologies (formerly Hitachi GST), effectively cutting the number of hard disk drive manufacturers to three. The total cost breaks down to 25 million WD stock shares worth $900 million and $3.9 billion in cash.
Western Digital CEO John Coyne touted the acquisition as "a truly momentous event" for the company, which will oversee the new subsidiary. Hitachi, meanwhile, will retain its brand name and product line.
"With ownership of two successful companies and the best talent available in the industry, we expect to accomplish great things as we build the new WD to be the world's leading storage solutions provider with the industry's deepest technology capability, broadest product portfolio and best-in-class execution," said Coyne, adding that supporting ultrabooks and developing hybrid HDDs places Western Digital "better positioned than ever for success."
Western Digital announced its acquisition of Hitachi's HDD division last March. The year-long process was scrutinized by regulating bodies, who finally gave the green light one week after the company revealed it would divest assets and make market concessions to competitor Toshiba.
The deal marks the third such merger in as many years. In 2009, Toshiba purchased Fujitsu's HDD business. And last December, Seagate announced it had concluded the acquisition of Samsung's.
Western Digital still faces hurdles in 2012. The company continues to pick up the pieces after flooding in Thailand last fall disrupted its HDD production output. Several HDD makers were affected by the disaster, but Western Digital suffered the brunt of it, losing the top market position when its drive shipments fell around 50 percent.
Analysts expect HDD prices to remain inflated due to constrained supplies through most of 2012. (Source: Western Digital)
