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Western Digital Bags Hitachi Storage Unit For $4.25 Billion

Another storage company bites the dust as Western Digital has announced the acquisition of HGST (Hitachi Global Storage Technologies), a unit of Japanese conglomerate giant Hitachi, for $3.5 billion in cash and 25 million shares valued at $30 each.

Hitachi will own 10 per cent of Western Digital following the deal and US-based Western Digital is expected to fund more than half of the transaction using its cash reserve as well as taking on some debt.

John Coyne, president and chief executive officer of WD, said in a press release that "The acquisition of Hitachi GST is a unique opportunity for WD to create further value for our customers, stockholders, employees, suppliers and the communities in which we operate".

HGST was established back in 2003 when Hitachi acquired the storage arm of IBM, which was behind the Deskstar, Ultrastar and Travelstar range of hard disk drives. The company has been caught off guard by the surprising exponential rise in the consumer-based SSD market.

The merger between Western Digital and HGST marks another step towards the ultimate consolidation in the traditional platter-based storage market; there are now only three major players left; Samsung, Western Digital and Seagate which also owns the Maxtor brand (ed : Toshiba as well in 2.5-inch form factor).

This compares with well over a dozen brands back in the days; IBM, Micropolis, Conner, Quantum, Digital, Fujitsu, JTS and the likes.