(Updates with comment from Western Digital in sixth paragraph.)
Nov. 23 (Bloomberg) -- 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 in a statement today. The Viviti deal can’t go ahead until a buyer, approved by the commission, has been found, the regulator said.
“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 EU Competition Commissioner Joaquin Almunia 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 only face Seagate Technology Plc 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 percent of the market, Seagate with 40 percent and Toshiba Corp. with around 10 percent, 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,” Steve Shattuck, a spokesman for Western Digital, said in an e- mailed statement.
Average hard drive prices have already jumped about 20 percent because of floods in Thailand, which is affecting infrastructure that churns out roughly 40 percent of the world’s drives.
--Editors: Peter Chapman, Robert Valpuesta
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