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© Western Digital Electronics Production | November 24, 2011

Western Digital must sell assets for acquisition approval

The European Commission has approved the acquistion of Hitachi GST by Western Digital, but will only allow the sale if Western Digital sells some of its assets.

The EC has now cleared the deal on the condition that Western Digital divest ”essential production assets for 3.5-inch hard disk drives (HDD), including a production plant, and accompanying measures.” Accompanying measures include the transfer of IP rights and personnel of the divested assets to the buyer. "Hard disk drives are a key component of computers and other sophisticated electronic devices as they are used to store a growing bulk of data in the digital economy. The proposed divestiture will ensure that competition in the industry is fully restored before the merger is implemented," said Commission Vice-President in charge of competition policy Joaquín Almunia. In March 2011 Western Digital agreed to a 4.3 billion dollar deal to acquire Hitachi GST (now named Viviti technologies) . The EC had concerns with the sale because it would reduce the number of disk drive competitors, with only Seagate/Samsung and Tobisha remaining as competors. According to the EC this could have a ”negative impact on customers' capability to obtain better prices and on suppliers' incentives to keep competing trough innovative products”.
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