Data storage specialist Western Digital and Hitachi Ltd. announced they have
entered into a definitive agreement whereby Western Digital will acquire
Hitachi Global Storage Technologies, a wholly owned subsidiary of Hitachi,
in a cash and stock transaction valued at approximately $4.3 billion.
Under the terms of the agreement, Western Digital will acquire Hitachi GST for
$3.5 billion in cash and 25 million Western Digital common shares valued at
$750 million, based on a Western Digital closing stock price of $30.01 as of
March 4. Hitachi will own
approximately 10 percent of Western Digital shares outstanding after issuance
of the shares, and two representatives of Hitachi
will be added to the Western Digital 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. Western Digital
said it plans to fund the transaction with a combination of existing cash and
total debt of approximately $2.5 billion.
The resulting company will retain the Western Digital name and remain
headquartered in Irvine, Calif. John Coyne will remain chief executive officer
of Western Digital, Tim Leyden chief operating officer and Wolfgang Nickl chief
financial officer. Steve Milligan, president and chief executive officer of Hitachi
GST, will join Western Digital at closing as president, reporting to Coyne.
"The acquisition of Hitachi GST is a unique opportunity for Western
Digital to create further value for our customers, stockholders, employees,
suppliers and the communities in which we operate," said 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."
He said the skills and contributions of both workforces were key considerations
in assessing the 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," he
said.
 |
