Western Digital buys Hitachi's Global Service Technologies Division

Changing hands!

The $4.3 billion deal has resulted in a 3.6 per cent rise in Hitachi’s shares. This move is also the biggest asset disposal step ever taken up by Hitachi. All shares of Hitachi’s Global Storage Technologies will be taken over by Western Digital. With over 850 units functioning under the umbrella brand, focusing on its prime areas might have been a recurrent issue. Hitachi now plans to concentrate on more infrastructural projects like making trains, power plants, among others.

What Western Digital would gain, you ask? Well! This pioneer has been steadily losing its hard disk market owing to big players like Apple Inc. not using their disk drives.  Post the agreement, the stocks of the company saw a 16 per cent surge, a notch higher than its steady competitor, Seagate Technology Plc. (STX) that managed a 9 per cent rise on NASDAQ Stock Exchange.

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Hitachi wasn’t the first choice for this buyout. Apparently, a year back, Western Digital had attempted to buy Seagate, yes, its competitor! But, the deal didn’t come through.

Observers of the whole deal believe that both the companies have entered into this deal at the right moment. We’d like to believe so, too.