Western Digital-Hitachi Deal Approved by FTC Pending Asset Sale to Toshiba
Western Digital Corp. (WDC) can buy Hitachi Global Storage Technologies Ltd. if it sells assets to Toshiba Corp. that Hitachi uses to make and sell desktop hard- disk drives, the U.S. Federal Trade Commission said.
The FTC approved the $4.5 billion acquisition under a settlement agreement that resolves the competitive issues raised by the transaction and enables Tokyo-based Toshiba to replace Hitachi Global Storage Technologies in the market for desktop hard drives, the agency said today in a statement
“Protecting competition in the high-tech marketplace is a high priority for the FTC,” Bureau of Competition Director Richard Feinstein said in the statement. The settlement “will ensure that vigorous competition continues in the worldwide market for desktop hard disk drives, and that consumers are not faced with higher prices or reduced innovation as a result of this deal,” he said.
According to the FTC, Toshiba (6502) can replace Hitachi Global Storage Technologies as a competitor in the worldwide market for desktop hard drives. Toshiba makes and sells hard drives for use with mobile devices and other applications, and doesn’t compete directly with Irvine, California-based Western Digital or Hitachi Global Storage Technologies, the FTC said.
Under the terms of the settlement, Toshiba will receive all of the productive assets needed to replicate Hitachi Global Storage’s position in the desktop hard drive market, the FTC said. The agreement also requires that Western Digital provide Toshiba with access to employees, license intellectual property, make disk drives and sell them to Toshiba until Toshiba is able to make them on its own, the FTC said.
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