Seagate Acquires WD for $16 Billion, New Company Named SeaWest
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This is a Press Release edited by StorageNewsletter.com on April 1, 2014 at 2:59 pmSeagate Technology plc, a world leader in HDD drives and storage solutions, and Western Digital Corp. announced that they have entered into a definitive agreement whereby Seagate will acquire WD and its subsidiary HGST in a cash and stock transaction valued at approximately $16 billion, including approximately $4.7 billion million in cash on WD’s balance sheet as of December 27, 2013.
The proposed combination will result in a customer-focused storage company, with significant operating scale, strong global talent and the industry’s broadest product lineup backed by a rich technology portfolio.
Under the terms of the agreement, Seagate will acquire WD for $4.5 billion in cash and 122 million Seagate’s common shares valued at $6.8 billion, based on a Seagate closing stock price of $55.92 as of April 1, 2014.
The transaction has been approved by the board of directors of each company and is expected to close during the first calendar quarter of 2015, subject to customary closing conditions, including regulatory approvals.
Seagate expects the transaction to be immediately accretive to its earnings per share on a non-GAAP basis, excluding acquisition-related expenses, restructuring charges and amortization of intangibles.
The resulting company will be named SeaWest LLC, retain the Western Digital and HGST brand names, and will be headquartered in George Town, Cayman Islands, and Cupertino, CA.
Stephen J. Luczo will be chairman and CEO of SeaWest.
“The acquisition of WD is a unique opportunity for Seagate to create further value for our customers, stockholders, employees, suppliers and the communities in which we operate,” said Luczo. “We believe this step will result in several key benefits-enhanced R&D capabilities, innovation and expansion of a rich product portfolio, comprehensive market coverage and scale that will enhance our cost structure and ability to compete in a dynamic marketplace. The skills and contributions of both workforces were key considerations in assessing this compelling opportunity. We will be relying on the proven integration capabilities of both companies to assure the ongoing satisfaction of our customers and to bring this combination to successful fruition.”
“This brings together two industry leaders with consistent track records of strong execution and industry outperformance,” said Steve Milligan, president and CEO, WD. “Together we can provide customers worldwide with the industry’s most compelling and diverse set of products and services, from innovative personal storage to solid state drives for the enterprise.”
Allen & Company LLC served as financial advisor and Wilson Sonsini Goodrich & Rosati served as primary legal advisor to Seagate in connection with the transaction.
Seagate will provide additional financial information for the combined company SeaWest on its fiscal third quarter conference call in late April.
Comments
For newspapers in some countries, it's a tradition to invent crazy news on April 1. This April fool
press release, dated April 1, has been totally invented by StorageNewsletter.com as we do each year for the fun.
It's a joke.
It will never happen for two reasons:
- WD is bigger than Seagate and then would have a better chance to acquire Seagate than the opposite.
- When Seagate bought Samsung HDD business and WD acquired Hitachi GST, the regulatory bodies in Europe and mainly in China obliged the acquirers to follow strong conditions not totally resolved. If now Seagate and WD are merged into one company, together they will represent more than 80% of the HDD worldwide market, with only one small competitor remaining, Toshiba. With three competitors, the prices of HDDs never declined as before being the result not only of the Thailand flood but also the new oligopoly. With just two, it will be worst and regulations bodies could not accept such a huge combination.
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