European Commission clears Western Digital’s acquisition of Hitachi’s hard disk drive business

On 23 November, the European Commission conditionally cleared Western Digital’s US$4.3bn acquisition of Hitachi Global Storage Technology. The Commission’s Phase II investigation found that there are separate worldwide markets for HDDs based on their form factor (3.5-inch or 2.5-inch) and end use (such as desktop computers, mobile computers, consumer electronics devices and enterprise business critical and mission critical applications). The Commission analysed the transaction on the basis that Seagate/Samsung had already merged. In certain segments, the Commission considered that there would remain three competitors post-merger, whilst in others the merger was considered as a “3 to 2”, with the combined Seagate/Samsung acting as the only remaining competitor. The proposed divestment of 3.5’’ assets will create a new third player in 3.5’’ hard disks post-merger. RBB advised Western Digital and Hitachi, working alongside Cleary Gottlieb Steen & Hamilton LLP, O'Melveny & Myers LLP and Morrison & Foerster LLP.