Western Digital (NYSE:WDC) Acquiring Hitachi (HIT) HDD ops for $4.3 Billion

With the goal of dominating the big business hard drive market, Western Digital (NYSE:WDC) announced it is acquiring the hard disk drive operations of Hitachi Ltd (NYSE:HIT) for $4.3 billion.

Investors liked the cash-and-stock deal by driving up Western Digital's share price by 16 percent in morning trading. Rival Seagate Technology Plc's (NASDAQ:STX) stock also jumped on the news.

On a conference call with analysts, Western Digital Chief Executive John Coyne said, "The combination of resources with HGST will provide a strong base to address incremental opportunities for WD utilizing other forms of storage, such as solid state and hybrid drives."

Flash drives, or solid-state drives (SSDs), are viewed by many as the future of the disk drive industry. They are faster, and unlike hard disk drives they have no moving parts and hence are more sturdy.

Although SSDs are still more expensive than traditional hard disk drives (HDD), they are increasingly being built into laptop PCs and tablet computers like Apple's iPad as they are more durable and consume less power.

Seagate was trading at $13.51, gaining $1.07, or 8.62 percent, as of 12:52PM EST. Hitachi was at $64.17, up $2.93, or 4.78 percent. Western Digital was at $33.47, up $3.46, or 11.53 percent.




Full Story