FTC proposed settlement requires Western Digital to sell hard disk drive assets to Toshiba

Under the FTC’s proposed settlement order, Western Digital must sell assets to resolve antitrust charges related to its $4.5 billion proposed acquisition of Hitachi Global Storage Technologies. Western Digital is to divest assets that are used to manufacture and sell desktop hard disk drives because of anticompetitive harm that would otherwise result from the merger in the market for desktop hard disk drives used in personal computers: without the divestiture, Western Digital and Seagate would be the only two companies for desktop hard disk drives.

The assets are to be sold to Toshiba within 15 days of the acquisition, along with access to employees involved in R&D and licensing of all IP to make and supply the hard disk drives until Toshiba can manufacture them on its own. Toshiba is not currently a competitor for desktop hard disk drives in personal computers, but the FTC believes that its experience manufacturing other types of hard disk drives puts Toshiba in a position to become an active competitor.

Full content: FTC Press Release

Related content: Observations on the Commission’s Evanston Remedy: When Is Divestiture, or Any Remedy, Not Appropriate for a Consummated Anticompetitive Merger? (Mark Botti, Akin Gump)