14 DAY TRIAL // The European Commission has finally given its stamp of approval for Western Digital's acquisition of Hitachi, but there is a catch, one that involves a production plant.
It was quite a while ago that Western Digital decided to buy Hitachi, all of it.
Hitachi agreed, but that didn't mean everything would go along quickly, which means that WD is, at this time, still not in official control of half the HDD market.
The European Commission had to evaluate the transaction and decide whether or not it approved of it.
Turns out it does, but with one condition that Western Digital has to fulfill.
The company has to sell one of its 3.5-inch hard disk drive production plants, along with the accompanying measures.
In other words, WD has to hurry up to find a buyer and, once the Commission approved of that deal, it can go ahead with the real acquisition.
As always, the Commission imposed this condition in order to make sure there was still competition in the industry.
“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,” said commission vice-president in charge of competition policy Joaquín Almunia.
“The proposed divestiture will ensure that competition in the industry is fully restored before the merger is implemented.”
Currently, HGST (Hitachi Global Storage Technology) is one of the main competitors to Seagate and WD.
Toshiba is a recent addition to the segment and, with just Seagate/Samsung left as high-tier HDD producer, the European Commission thinks there won't be enough rivalry to ensure that innovation does not lax.
This is probably one of the most inopportune times for something like this, though. HDDs just fell into a pit because of sudden price hikes after the Thai floods closed factories, which means that even those plants WD wasn't previously all that attached to are more important than before.