Western Digital sells media business to Komag

Takes $20 million charge, axes 550 jobs

Western Digital will take a fourth quarter charge of $20 million to cover the sale of its disk media business. The disk maker confirmed it had sold the business for 10.8 million Komag shares, a $30.1 million three-year note and $1.6 million in cash. It added that around half the staff in its media operation would be lost. Komag, which makes magnetic platters that record information inside disk drives, has also taken on leases connected to production equipment and facilities. This includes a three-year purchase agreement, during which Western will buy a big chunk of its media from California-based Komag. As a result of the acquisition, US giant Western expects to take a $20 million charge, including $3 million in cash. A First Call survey of 12 analysts predicted Western would lose 30 cents a share in the fourth quarter. For the fourth quarter the previous year ended 27 June, Western lost $167.7 million, or $1.84 cents a share. 550 out of 1000 jobs will be slashed at Western's disk media business. ®

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