Japan OKs WD/Hitachi GST Deal

On December 28, 2011, the Japan Fair Trade Commission (JFTC) announced that it closed its reviews on the two proposed M&As in the HDD sector and wrote: "As a result of the review regarding the acquisition of shares, the JFTC acknowledged that, given the remedies proposed by WDI [Western Digital Ireland Ltd.], competition in any particular field of trade might not be substantially restrained."

On the subject, Bloomberg, generally a reliable source of information, added:" Western Digital has agreed to sell about 10 percent of its units producing 3.5-inch hard disk drives for personal computers and consumer electronics, the commission said in a statement today."

Finally Japan followed the European Commission as well as the Australian regulatory body, estimating that there was a risk for limited competition in 3.5-inch HDDs with only Seagate and WD mainly operating in this field.

WD has not released the name of the company that will buy part of this 3.5-inch HDD activity. Toshiba, TDK, ExcelStor or maybe a new Chinese company are rumored to be the buyers.

EU didn’t precise which amount of this activity has to be sold. For Japan it’s 10%.

WD shipped 58 million disk drives in 3Q11 including 26 million desktop units. Then the production of around 2.6 million devices will have to be transferred to a competitor.

For the acquisition of Samsung HDD business by Seagate, the Chinese
Ministry of Commerce (MOC) published a
statement
clearing the path for the two brands’ alignment in China. Not yet for the deal between Western Digital and Hitachi GST announced
on March 7 this year for $4.3 billion in cash and stock.

We are now waiting for the Chinese decision on the subject, WD stating that the acquisition will be completed in March 2012.