Western Digital Selling 3.5-Inch Desktop Hard Drive Assets To Toshiba

Western Digital is preparing to purchase Hitachi’s storage group and in order to make sure that deal is approved the company will first divest some of its 3.5-inch desktop hard drive assets to Toshiba.

The deal would release WD of it’s Thailand assets while providing Toshiba with the ability to manufacturer 3.5-inch hard drives for home users while creating improved specialized drives for pro users.

Before the Hitachi deal can be completed officials from the European Union declared that Western Digital must first divest it’s 3.5-inch hard drive business to Toshiba.

After the deal is finalized Western Digital will spend $4.3 billion to acquire the Hitachi division which officials hope will allow the company to fend off competition from Seagate following that company’s purchase of Samsung’s hard drive business. WD also hopes the acquisition will allow it enter a larger sector of the hard drive business including focuses in mobile and embedded drives.

It’s still unclear how the acquisition will affect the storage industry as a whole since a large part of storage oversight internationally is currently filled by Western Digital, oversight that would place Toshiba in the midst of deals with PCs, MP3 and other device manufacturers.

Do you think Western Digital’s acquisition of Hitachi will better allow the company to compete against Seagate by diversifying it’s portfolio to focus more efforts on mobile and embedded drives?