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Western Digital, Hitachi GST make it official

Western Digital’s $4 billion-plus acquisition of Hitachi Global Storage Technologies (HGST) officially closed today – a year and two days after the hard drive vendors first declared their intention to merge.

Western Digital is paying $3.9 billion in cash and 25 million shares of its common stock currently valued at $900 million for HGST, the world’s second largest enterprise drive vendor.

The deal had to clear regulation hoops from regulatory groups around the world because the deal makes the combined companies the largest hard drive vendor with 47% of the market, surpassing Seagate’s 32% market share.

HGST owns 9% of the enterprise market compared to Seagate’s 56%. Western Digital has only 1% of the enterprise market and 30% of the overall hard drive market without HGST.

Western Digital said it will operate HGST as a subsidiary, and it will maintain the HGST brand and separate product lines.

HGST’s enterprise products include solid-state drives (SSDs), and it scored a big win this week when it revealed that EMC is shipping Hitachi Ultrastar SSD400S single-level cell (SLC) 2.5-inch SAS SSDs in its VNX unified storage arrays.

Mitch Abbey, HGST’s senior enterprise product line manager, said he expects more SSD qualifications with EMC and other storage vendors. He also said HGST has cheaper multi-level cell (MLC) drives in the works and is reviewing the PCIe market for server-based flash to determine if it’s worth putting out that type of product.

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