updated 10:40 pm EST, Tue February 28, 2012
WD makes Toshiba deal to keep Hitachi buyout alive
Western Digital struck a deal late Tuesday to divest some of its 3.5-inch desktop hard drive assets to Toshiba. The pact would see WD buy Toshiba's storage group in Thailand, as well as give away other elements, as a condition of WD's buyout of Hitachi's storage group. By the completion of the deal, Toshiba could make desktop 3.5-inch hard drives for home users, and it could improve its ability to make specialized drives for pro uses.
Regulators approving the handoff to Toshiba will depend on the Hitachi deal being approved. When that happened wasn't mentioned, but the original acquisition had been made public in March of last year.
The purchase of the Hitachi division, worth $4.3 billion, was made primarily to help WD scale larger and fend off competition from Seagate. Hitachi's section would also fill out more of WD's range, by improving its focuses on mobile and embedded drives.
A Toshiba shift could have significant ramifications for hard drive supply, though not necessarily negative. It may see more companies' PCs and MP3 players like the iPod classic fall under WD's oversight.