Western Digital – Hitachi Transaction

On March 5, 2012, the Federal Trade Commission cleared Western Digital Corp.’s acquisition of Hitachi Global Storage Technologies. The companies produce hard disk drives (HDD) for use in computers and other devices. In a settlement with the FTC, the companies agreed to divest to Toshiba Corp. assets used to produce 3.5” HDDs for desktop computers. In November 2011, the European Commission approved the acquisition with divestiture of certain assets. Along with Seagate’s acquisition of Samsung Electronics Co.’s HDD business, the Western Digital – Hitachi transaction reduces the number of HDD producers from 5 to 3. Professor Dennis Carlton, Bradley Reiff and Lynette Neumann of Compass Lexecon were retained by Western Digital to analyze the competitive effects of the proposed acquisition and to evaluate its efficiencies. They presented their findings at the Federal Trade Commission and in a report presented to the European Commission. Compass Lexecon worked with legal teams headed by George Cary at Cleary Gottlieb Steen & Hamilton LLP (representing Western Digital in the U.S.), Francisco Enrique Gonzalez-Diaz at Cleary Gottlieb Steen & Hamilton LLP (representing Western Digital in Europe), and Stephen Smith at Morrison & Foerster LLP (representing Hitachi Global Storage Technologies).