Hitachi buyout: FTC and UE force a 3-way deal

Hitachis GST Ultrastar SSD400S.BFor starters, Western Digital started to work on Hitachi GST acquisition about a year ago. Hitachi GST is the storage branch of Hitachi, a company worth of the 18% of the global HD’s market. Not so bad compared to WD’s 31% and Seagate’s 29% (data acquired at the time of the original offer).

As you can see from the numbers, the HD supply is much concentrated and this isn’t good from a consumer point of view. So the Japanese regulators asked WD to sell the 10% of its 3.5″ drives manufacturing unit, as a conditions for the acquisition’s approval. Apparently, the deal was ready.

But a problem occured. For FTC and UE 10% isn’t enough, so they forced Western Digital to sell the Hitachi GST’s 3.5″ business and grant all the needed licenses. The buyer is going to be Toshiba that currently produces only 2.5″ drives.

So the original agreement evolved into a three-way deal: Hitachi GST has two main businesses unit, 3.5″ and 2.5″ drives manufacturing. The former will be acquired by Toshiba while the latter by Western Digital. The deal will probably be finalised within march.

The market is not going to change even if we will see a greater Western Digital. Probably the deal would be really interesting for Toshiba, considering the opportunity to inherit Hitachi’s server market shares. I’m happy to see antitrust regulators doing their job, it’s reassuring :)

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