As part of its bid to acquire Hitachi's hard drive business, Western Digital has agreed to transfer an "asset package" to rival HDD maker Toshiba. The combination of equipment and intellectual property will allow Toshiba to manufacture 3.5" desktop drives, a class of products it doesn't currently produce. Toshiba makes 3.5" drives for servers in addition to 2.5" models for multiple markets, but that's about it for internal mechanical storage.
As part of the deal, WD will acquire a Toshiba HDD facility in Thailand—one that hasn't resumed operations since being flooded last fall. The facility and its employees are expected to be integrated into Western Digital's Thailand operations when the deal goes through.
As the press release points out, WD is giving Toshiba the tools to make 3.5" desktop drives in order to "address the requirements of regulatory agencies that have conditionally approved or are continuing to review the company's planned acquisition of Hitachi Global Storage Technologies (HGST)." It seems WD had to take on a water-logged facility to make the deal worth Toshiba's while, although nothing has been finalized yet. The Toshiba deal only goes through if WD completes its acquisition of HGST, which could happen as early as next month. Thanks to The Verge for the tip.
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