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Appeared on: Tuesday, May 15, 2012
Toshiba Completes Acquisition of WD's HDD Manufacturing Equipment And Facility

Western Digital has completed its divestiture of certain 3.5-inch hard drive assets to Toshiba, as required by regulatory agencies that conditionally approved the company's completed acquisition of Viviti Technologies Ltd. (formerly Hitachi Global Storage Technologies).

The transactions were essential in order WD to close the purchase of Hitachi's hard disk drive business (HGST) for $4.3 billion. Late last year, Western Digital secured conditional approval from the European Union's competition regulator to purchase Hitachi's hard disk drive business. However, the approval was conditional upon the divestment of essential production assets for 3.5-inch hard disk drives (HDD), including a production plant, and accompanying measures.

Toshiba has acquired certain 3.5-inch HDD manufacturing equipment and related intellectual property from Western Digital and transfered to Western Digital all shares of Toshiba Storage Device (Thailand) Co., Ltd. The principal assets of TSDT are its Thailand property, facilities and employees, which WD plans to integrate into its Thailand operations.

The financial terms of the two agreements were not disclosed.

Toshiba is expected to benefit from the transactions. The acquired assets will enable Toshiba to manufacture and sell 3.5-inch hard drives for the desktop and consumer electronics markets and will enhance its ability to manufacture and sell 3.5-inch hard drives for near-line (business critical) applications.

The acquisition positions Toshiba to start sales of 3.5-inch HDD for desktop PCs and DVD recorders and to enhance supply of near-line HDDs for servers, a market segment that is expected to grow with the server market.

Toshiba believes that consolidation of HDD production at two manufacturing facilities in the Philippines and a contract manufacturer in China will allow the company to strengthen its cost competitiveness by boosting manufacturing efficiency.

Having completed this reinforcement of its HDD operations, Toshiba aims to double sales in the business to 800 billion yen in fiscal year 2014.


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