The deal will see a cash and stock transaction. Hitachi GST will go for $3.5 billion and 25 million Western Digital common shares, valued at $750 million, based on a closing price for Western Digital on the 4th March. Hitachi will then own ten percent of Western Digital shares outstanding.
Two representatives for Hitachi will find themselves on Western Digital’s board of directors when the deal is closed.
It has been approved by the board of directors of both companies and should finalise by Q3 2011, as long as the normal regulatory procedures do not hiccup.
Western Digital is funding the transaction with existing cash and a total debt of about $2.5 billion.
The company will still be called Western Digital and remain nested in Irvine, California. The CEO of Western Digital will be unchanged, with John Coyne leading the charge. Hitachi GST’s Steve Milligan, currently president and CEO at the company, will be joining Western Digital at closing as a president – with Coyne as his boss.
Portfolios and the like will become joined at the hip, but representatives from both are hoping the deal will lead to a broader range of “customer focused” kit – what else?
*EyeSee Both Hitachi and Western Digital have been talking up their 3TB drives, possibly to each other’s annoyance.