Western Digital must sell assets for acquisition approval
The EC has now cleared the deal on the condition that Western Digital divest “essential production assets for 3.5-inch hard disk drives (HDD), including a production plant, and accompanying measures.” Accompanying measures include the transfer of IP rights and personnel of the divested assets to the buyer. “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. The proposed divestiture will ensure that competition in the industry is fully restored before the merger is implemented,” said Commission Vice-President in charge of competition policy Joaquín Almunia.In March 2011 Western Digital agreed to a 4.3 billion dollar deal to acquire Hitachi GST (now named Viviti technologies) . The EC had concerns with the sale because it would reduce the number of disk drive competitors, with only Seagate/Samsung and Tobisha remaining as competors. According to the EC this could have a “negative impact on customers’ capability to obtain better prices and on suppliers’ incentives to keep competing trough innovative products”.