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Toshiba may be getting excess WD disk biz

Rumour mill spits out Tosh as buyer

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We are hearing that Toshiba is buying Western Digital's "excess" 3.5-inch disk drive business, clearing the way to the completion of the WD's acquisition of Hitachi GST .

The Hitachi GST acquisition has been blocked by EU and Chinese regulators due to competition concerns. The EU has required WD to offload some 3.5-inch hard disk drive capacity to prevent an undue concentration of the manufacturing in the sector.

According to our contacts Toshiba is getting a license for 3.5-inch nearline HDD intellectual property, business commitments including the supply of some amount of HGAs (Head Gimbal Assemblies), and a Hitachi GST plant in China.

Back in November, 2009 Toshiba said it wanted to enter the 3.5-inch HDD business. It now looks as if it is going to get a WD leg-up into that area of HDD supply. It had also been thought the Great Wall business in China was an alternative purchaser to Toshiba.

No information about the financial terms is available, but if the approval processes don't complete by 7 March there will be a $250m termination fee to be paid to HGST, sources report. The deal is done and will close before the end of March, we're told.

WD's head PR Honcho, Steve Shattuck, wasn't able to confirm the details, saying: "I know nothing about that." Even if the deal has actually been done we wouldn't expect WD to say anything until all the announcement ducks were lined up. To do otherwise is simply not the WD way.

Toshiba was not immediately able to respond to questions.

What we have here is a hot little tip in our sticky mitts about some very hot news and no confirmation. Take it for what it is and don't bet anything substantial on it until we get an official yea or nay from Toshiba and WD. ®

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