The EU has a bone to pick with the industry about two separate takeover bids in the computer hardware sector.
Apparently, the concern is that Seagate Technology’s bid for Samsung Electronics’ loss-making hard disk drive unit and Western Digital’s purchase of Hitachi’s storage business will reduce competition.
Competition Commissioner Joaquin Almunia said in a statement that hard drives are “the backbone”of the digital economy.
Everyone knows that the backbone is connected to the neck bone and the neck bone’s connected to the head bone, now hear the word of the law.
Industry analysts had been expecting consolidation in the hard-drive market for a while, and Almunia said that has already experienced enough. The proposed acquisitions will further reduce competition.
Seagate Technology wants to buy Samsung’s hard-disk drive business for $1 billion and Western Digital has offered $4.3 billion for Japanese company Hitachi’s hard drive unit.
If the deals go through, the number of large manufacturers in the sector will shrink from three from five. Western Digital would then have half the market while Seagate would have 40 per cent.
Toshiba would have 10 percent of the market. The regulators say they will decide by 10 October on whether the deals will be cleared or blocked or if the industry needs a spinal tap.