A day after Seagate sealed the deal with Samsung, we’ve learned Western Digital has hit a snag with their acquisition of Hitachi. On November 23rd Western Digital announced the European Commission had approved the deal, but with conditions. Western Digital had anticipated certain actions would be required to close the transaction but still felt the deal would close this year. That is apparently not the case as the estimated close has been pushed back a quarter to the end of March.
A day after Seagate sealed the deal with Samsung, we’ve learned Western Digital has hit a snag with their acquisition of Hitachi. On November 23rd Western Digital announced the European Commission had approved the deal, but with conditions. Western Digital had anticipated certain actions would be required to close the transaction but still felt the deal would close this year. That is apparently not the case as the estimated close has been pushed back a quarter to the end of March.
Western Digital issued the following statement to StorageReview:
As previously indicated, we continue to work with the remaining regulatory authorities who have not yet rendered their decision on our acquisition of HGST, and to satisfy the remedy provision included in the European Commission’s conditional approval of the transaction. Subject to completing these actions, WD is expecting to close the transaction by March 2012. We continue to believe that our transaction with Hitachi will enhance competitiveness and our ability to provide value to our customers [and through our customers to consumers].
While some minor regulatory agencies have not given approval, it’s likely they’re simply waiting for the European Commission to give WD the nod. The problem with the EC however is that Western Digital is required to sell off assets to close the deal, which include intellectual property and facilities. One of those facilities happens to be a 3.5" hard drive plant. WD recently gave an update that indicated plant recovery in Thailand was progressing well, but even so, those damaged plants are in no position to be sold before the end of the year. There’s also the matter of finding a buyer for the plant, which when eliminating Seagate/Samsung leaves WD with precious few options.
