Hitachi Ltd. (6501) will post a 191 billion yen ($2.3 billion) gain from the sale of its hard-disk drive unit to Western Digital Corp. (WDC)
The transaction was valued at $4.8 billion including Western Digital common stock worth $900 million, or 10 percent of outstanding shares, Tokyo-based Hitachi said in a statement today. Hitachi said it’s evaluating the impact on its earnings.
The proceeds exceeded Hitachi’s estimate of 110 billion yen, following improvements at the hard-disk drive unit, Hajime Kito, a Hitachi spokeswoman, said by phone.
The company completed the sale yesterday, after the U.S. Federal Trade Commission approved it earlier this week under a settlement agreement that resolves competition issues raised by the transaction. Under the conditions of the agreement, Western Digital will sell assets to Toshiba Corp. (6502) that Hitachi uses to make and sell desktop hard-disk drives.
Hitachi forecasts net income of 200 billion yen for the year ending March 31, down 16 percent from a year earlier, the company said in February.
Hitachi rose 1.1 percent to close at 475 yen in trading on the Tokyo Stock Exchange.
To contact the reporter on this story: Naoko Fujimura in Tokyo at email@example.com
To contact the editor responsible for this story: Michael Tighe at firstname.lastname@example.org