Western Digital has just announced an agreement to acquire Hitachi Global Storage Technologies in a cash and stock deal valued at about $4.3 billion. Under the terms of the agreement, Japan's Hitachi will sell its wholly owned hard disk drive business for $3.5 billion in cash and 25 million Western Digital common shares valued at $750 million, based on a stock price of $30.01. Hitachi will own about 10% of Western Digital's shares after the deal closes and two representatives of the company will be added to Western Digital's board.
The transaction is expected to close in the third quarter of the year, pending regulatory approval, and should help Western Digital strengthen its leading position in the market after taking the crown from Seagate. In 2010, Western Digital represented 31.4% of the hard drive market, nearly two percentage points ahead of Seagate's share of 29.6%. Hitachi GST took third place in overall shipments with 16.4%, ahead of Toshiba/Fujitsu at 12.6% and Samsung at 9.2%.
Besides the acquisition plans Western Digital also recently reveled its interest in developing a hybrid drive combining spinning disk and solid-state storage, along the lines of Seagate's Momentus XT. The company noted that hybrid hard drives still need better support from operating systems to reach their full potential, and that such a drive could show up in gaming systems because of the better performance, as well as enterprise and mobile environments.