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Western Digital wins European Union approval for Hitachi deal

November 24, 2011|Bloomberg News

Western Digital Corp. won European Union approval for its purchase of Hitachi Ltd.'s Viviti storage business after it agreed to sell off some disk drive production to eliminate antitrust concerns.

Western Digital has agreed to sell "essential production assets" for 3.5-inch hard disk drives, including a production plant and intellectual property rights linked to the business, the European Commission said Wednesday.

"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," EU Competition Commissioner Joaquin Almunia said in the statement. "The proposed divestiture will ensure that competition in the industry is fully restored."

The sell-off pledge eliminated concerns that Western Digital would face only Seagate Technology as a rival supplier of hard disk drive units, the commission said. Seagate last month won EU approval to buy Samsung Electronics Co.'s computer hard disk drive operations.

The two transactions would reduce the number of large manufacturers of mechanical hard disk drives for computers to three from five, leaving Western Digital with 50% of the market, Seagate with 40% and Toshiba Corp. with about 10%, according to researcher IHS Inc.'s iSuppli.

"We are working to meet the remedy condition so that we may proceed to complete the acquisition as soon as possible," said Steve Shattuck, a spokesman for Irvine-based Western Digital.

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