Western Digital (WD) and Hitachi have entered into an agreement whereby WD will acquire Hitachi Global Storage (Hitachi GST), a wholly-owned subsidiary of Hitachi, in a cash and stock transaction valued at approximately Rs 21,500 crore.
<script type="text/javascript" src="http://altfarm.mediaplex.com/ad/!js/11699-123604-30488-1?mpt=[CACHEBUSTER]&mpvc="> </script> <noscript> <a href="http://altfarm.mediaplex.com/ad/nc/11699-123604-30488-1?mpt=[CACHEBUSTER]"> <img src="http://altfarm.mediaplex.com/ad/nb/11699-123604-30488-1?mpt=[CACHEBUSTER]" alt="Click Here" border="0"> </a> </noscript>The proposed combination will result in a customer-focused storage company, with operating scale, global talent and the industry’s broad product lineup.
Under the terms of the agreement, WD will acquire Hitachi GST for Rs 17,500 crore in cash and 25 million WD common shares valued at Rs 375 crore, based on a WD closing stock price of Rs 1,500 as of March 4, 2011. Hitachi, will own approximately 10 percent of WD shares outstanding after issuance of the shares and two representatives of Hitachi will be added to the WD board of directors at closing.
The transaction has been approved by the board of directors of each company and is expected to close during the third calendar quarter of 2011, subject to customary closing conditions, including regulatory approvals. WD plans to fund the transaction with a combination of existing cash and total debt of approximately Rs 1250 crore.
The resulting company will retain the WD name and remain headquartered in Irvine, California. John Coyne will remain CEO of WD, Tim Leyden, CEO and Wolfgang Nickl, CFO. Steve Milligan, President and CEO of Hitachi GST, will join WD at closing as President, reporting to Coyne.
“The acquisition of Hitachi GST is a unique opportunity for WD to create further value for our customers, stockholders, employees, suppliers and the communities in which we operate,” said Coyne. “We believe this step will result in several key benefits enhanced R&D capabilities, innovation and expansion of product portfolio, market coverage and scale that will enhance our cost structure and ability to compete in a dynamic marketplace."
"As the former CEO of Hitachi GST, I always believed in the potential of Hitachi GST to become a larger and more agile company. This is a strategic combination of two industry leaders, both growing and profitable. It provides an opportunity for the new company to increase customer and shareholder value and expand into new markets. Additionally, it is important to us that WD shares common values with Hitachi GST to create a more global company that is well positioned to define a broader role in the evolving storage industry," Hiroaki Nakanishi, President, Hitachi said.
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Under the terms of the agreement, WD will acquire Hitachi GST for Rs 17,500 crore in cash and 25 million WD common shares valued at Rs 375 crore, based on a WD closing stock price of Rs 1,500 as of March 4, 2011. Hitachi, will own approximately 10 percent of WD shares outstanding after issuance of the shares and two representatives of Hitachi will be added to the WD board of directors at closing.
The transaction has been approved by the board of directors of each company and is expected to close during the third calendar quarter of 2011, subject to customary closing conditions, including regulatory approvals. WD plans to fund the transaction with a combination of existing cash and total debt of approximately Rs 1250 crore.
The resulting company will retain the WD name and remain headquartered in Irvine, California. John Coyne will remain CEO of WD, Tim Leyden, CEO and Wolfgang Nickl, CFO. Steve Milligan, President and CEO of Hitachi GST, will join WD at closing as President, reporting to Coyne.
“The acquisition of Hitachi GST is a unique opportunity for WD to create further value for our customers, stockholders, employees, suppliers and the communities in which we operate,” said Coyne. “We believe this step will result in several key benefits enhanced R&D capabilities, innovation and expansion of product portfolio, market coverage and scale that will enhance our cost structure and ability to compete in a dynamic marketplace."
"As the former CEO of Hitachi GST, I always believed in the potential of Hitachi GST to become a larger and more agile company. This is a strategic combination of two industry leaders, both growing and profitable. It provides an opportunity for the new company to increase customer and shareholder value and expand into new markets. Additionally, it is important to us that WD shares common values with Hitachi GST to create a more global company that is well positioned to define a broader role in the evolving storage industry," Hiroaki Nakanishi, President, Hitachi said.
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