Thursday, 5 July 2007

Western Digital Buys Hard Disk Maker Komag For USD1 B

US based Western Digital has acquired its smaller rival Komag for USD 1 billion. Western Digital will pay USD32.25 in cash per share for a value of approximately USD1 billion...

US based Western Digital has acquired its smaller rival Komag for USD 1 billion. Western Digital will pay USD32.25 in cash per share for a value of approximately USD1 billion. The acquisition of Komag, a media manufacturer, will further strengthen Western Digital's position as a top hard drive maker by integrating media, one of the critical technology components of a hard drive.

The transaction will be structured as a cash tender offer for all the outstanding shares of Komag common stock, followed by a merger of a whollyowned subsidiary of Western Digital into Komag in which the remaining shareholders of Komag will receive USD32.25 in cash per share. The transaction has been unanimously approved by the board of directors of each company and is subject to customary closing conditions, including regulatory approvals, and is expected to close in the third calendar quarter of 2007.

Western Digital will fund the transaction, including the expected retirement of Komag's convertible notes due 2014, through a combination of the companies' cash and proceeds from a senior secured term loan of up to USD1.25 billion.