8-KLeadership ChangesAcquisitions & DispositionsMaterial Agreements+4

WESTERN DIGITAL CORP 8-K Report, Material Agreement (Mar 9, 2012)

Filed March 9, 2012For Securities:WDC

Summary

Western Digital Corporation (WDC) has filed an 8-K report detailing the completion of its acquisition of Hitachi Global Storage Technologies (HGST) on March 8, 2012. This transformative deal, valued at approximately $4.85 billion ($3.9 billion in cash and $947 million in WDC stock), significantly expands WDC's market presence and product portfolio in the hard drive industry. The report also outlines key agreements and operational changes associated with this acquisition. These include an Investor Rights Agreement with Hitachi Ltd., granting Hitachi certain board nomination rights and imposing standstill and transfer restrictions on Hitachi's holdings. Furthermore, WDC has secured a new $2.8 billion credit facility to help finance the transaction and refinance existing debt. Significant executive appointments have also been made, including the naming of Stephen Milligan as President and the establishment of a new Office of the CEO comprising key leadership figures.

Key Highlights

  • 1Completion of the acquisition of Hitachi Global Storage Technologies (HGST) for approximately $4.85 billion (cash and stock).
  • 2Hitachi Ltd. granted rights to nominate two directors to WDC's Board under an Investor Rights Agreement.
  • 3Hitachi is subject to standstill and transfer restrictions on its WDC stock holdings.
  • 4Secured a new $2.8 billion unsecured credit facility to fund the acquisition and refinance debt.
  • 5Stephen Milligan appointed as President of Western Digital.
  • 6Established an Office of the Chief Executive Officer including John Coyne, Timothy Leyden, Stephen Milligan, and Wolfgang Nickl.
  • 7Existing credit agreement terminated upon entering the new Credit Facility.

Frequently Asked Questions

This 8-K filing announces the closing of Western Digital Corporation's acquisition of Hitachi Global Storage Technologies (HGST) and details the material definitive agreements and other events related to this significant transaction.

The acquisition was financed through a combination of approximately $3.9 billion in cash and 25 million shares of Western Digital's common stock. The cash portion was funded by borrowings under a new $2.8 billion credit facility and existing cash on hand.

The Investor Rights Agreement grants Hitachi the right to nominate two directors to Western Digital's Board. It also imposes 'standstill' restrictions, limiting Hitachi's ability to acquire more WDC stock or influence control, and includes transfer restrictions on Hitachi's WDC shares for a period.

Yes, Stephen Milligan, formerly President and CEO of HGST, has been appointed President of Western Digital. Additionally, an Office of the Chief Executive Officer has been established, comprising CEO John Coyne, COO Timothy Leyden, the new President Stephen Milligan, and CFO Wolfgang Nickl.