Western Digital to acquire Komag for $ 1 bln

Western Digital Corporation and Komag, Inc. Announced they have entered into a definitive agreement for WD to acquire Komag for $32.25 in cash per share for a value of $1 bln. The acquisition of Komag, a leading media manufacturer, will further strengthen WD’s position as a highly-efficient 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 wholly-owned subsidiary of WD into Komag in which the remaining shareholders of Komag will receive $32.25 in cash. The transaction is expected to close in the third calendar quarter of 2007.

WD 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 $1.25 bln.

“This acquisition is a significant step in the evolution and differentiation of WD as a leader in the worldwide hard drive industry,” said John Coyne, WD President and Chief Executive Officer. “Following the successful integration of the Read-Rite head assets since 2003, we are very excited by the opportunity to drive incremental profitability and efficiencies in the WD business model through the full integration of Komag’s media operation.”