Western Digital absorb Hitachi, snatch increased market share

In a US$4.3 billion buyout, Western Digital acquires Hitachi - one of the world's leading storage manufacturers.

Many claimed the advent of solid-state flash storage would defeat the older mechanical-based hard drives and their manufacturers, but for both Western Digital and Hitachi, this market is ripe for the picking.

Announced today is an agreement between both companies that aims to bring Hitachi into the Western Digital fold, which comes at an effective cost of US$4.3 billion, split between $3.5 billion in cash and 25 million in WD shares, an effective ten per cent.

As explained in the official press release, "WD plans to fund the transaction with a combination of existing cash and total debt of approximately $2.5 billion."

While this does mean the combined companies will be behind in the monetary stakes, known beyond this deal as simply Western Digital, the directors believe that ultimately this move will benefit both companies.

John Coyne, President and CEO at WD weighed in on the merger: "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."

Steve Milligan, who acted as President and CEO of Hitachi Global Storage Technologies furthers, "Together we can provide customers worldwide with the industry's most compelling and diverse set of products and services, from innovative personal storage to solid state drives for the enterprise."

It's exactly that agility and dynamism that Western Digital will need to survive in the very long-term, and we're cautiously optimistic to see how this meeting of storage giants will benefit the computing industry.