Western Digital closes HGST deal after a year

Enlarged firm to operate as two competing subsidiaries

A hard drive superpower came into being last night after Western Digital finally closed its acquisition of Hitachi Global Storage Technologies (HGST).

Western Digital last night said it had completed its purchase of Viviti Technologies - formerly HGST - for $3.9bn in cash and about $0.9bn in shares, a year after the deal was first mooted.

Last week, Western Digital paved the way to close a deal it originally expected to put to bed in Q3 by reaching an agreement to sell certain 3.5in assets to Toshiba.

The enlarged firm, which has combined revenues of $15bn, will operate as two wholly owned subsidiaries with competing brands and product lines.

Western Digital chief executive John Coyne described closing the deal as a "truly momentous event" in the firm's 42-year history.

"Similar to successful multi-brand models in other industries, the two subsidiaries will compete in the marketplace with separate brands and product lines, while sharing common values of customer delight, value creation, consistent profitability and growth," he said.

The HDD market is forecast to enjoy a compound annual growth rate of 8.6 per cent from 2011 to 2016, according to IDC.

"With a significantly broadened customer base and expanded resources, the new Western Digital is in a strong position to seize the growth opportunity in stored digital content," said Coyne