Seagate, Western Digital merger deals face EC probe

A consolidation in the hard-drive market has raised competition concerns from European regulators

Moves by Seagate and Western Digital to acquire hard-drive companies are being probed by European regulators because of "competition concerns", the European Commission said on Monday.

The proposed acquisitions will "further reduce competition", the EC said in a statement citing concerns about a significant consolidation in the hard-drive market.

"Hard drives are the backbone of the digital economy," Joaquin Almunia, vice president of competition policy at the European Commission, said in the statement. "The Commission will carefully examine if effective competition is preserved and innovation encouraged."

Western Digital said in March it would acquire Hitachi's hard drive business for US$4.3 billion. Competitor Seagate said a month later it would acquire Samsung's hard drive business for $1.38 billion.

Seagate and Western Digital are currently the top two hard-drive vendors in the market, according to market research firm IHS iSuppli.

Western Digital's acquisition of Hitachi's hard-drive business could make it the largest hard-drive vendor with about 50 percent of the worldwide market, according to iSuppli. Seagate's acquisition of Samsung's hard-drive operations could give the combined company a 40 percent market share, said Fang Zhang, an iSuppli analyst, in a blog entry in early May.

The remaining market share would belong to Toshiba, which in 2009 acquired Fujitsu's hard drive business.

The Commission has until Oct. 10 to determine whether the transactions impede competition and are detrimental to business customers and consumers. The investigation of the proposed transactions will include a look at whether the deals could affect pricing and supply of hard drives. The merger deals with be assessed separately, the EC said.

Western Digital is proceeding with plans to complete the acquisition of Hitachi's hard drive business, the company said in a statement. The acquisition is now expected to close in the fourth quarter of this year, a postponement from the planned closure in the third quarter that the company announced in March. Seagate did not immediately respond to a request for comment.

The hard-drive market is slowing down as sales of flash storage and solid-state drives grow. Hard-drive sales totaled $27 billion in 2010, and are expected to grow by 4.1 percent to $28 billion this year, according to iSuppli. Hard drive sales will grow, albeit at a slower pace, through 2015, it said.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags Seagate Technologybusiness issuesantitrustMergers / acquisitionslegalwestern digital

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments

Cool Tech

Breitling Superocean Heritage Chronographe 44

Learn more >

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?