EC clears Hitachi's IBM disk takeover

By Matt Whipp

Posted on 5 Aug 2002 at 17:29

The European Commission has given the go-ahead for Hitachi to acquire sole control of IBM's hard disk business.

A statement issued by the Commission reads that although 'As a result of the transaction, Hitachi will have a leading position in HDDs for mobile applications... The Commission has concluded that the transaction does not raise serious doubts as to its compatibility with the common market.'

Additionally, the Commission decided that competition in the market would remain healthy because, due to 'low switching costs [customers] can and do shift quantities quickly from one supplier to another,' and that 'incumbent HDD manufacturers face relatively low barriers to entry into the mobile HDD segment'.

While the $2bn deal would put Hitachi into a leading position within the hard disk sector, it also rids IBM of a loss-making division.