Western Digital cleared to buy Hitachi disk drive business

Logos of Hitachi are seen at a shopping mall in Tokyo October 29, 2009.

BRUSSELS (Reuters) - Western Digital has secured conditional approval from the European Union's competition regulator to purchase Hitachi's hard disk drive business for $4.3 billion, after it agreed to sell several production operations.

Western Digital, the world's second-biggest player in the hard disk drive (HDD) sector, and Hitachi, the third-biggest, unveiled the deal in March, which is aimed at giving the U.S. company an edge in developing next-generation information storage technology.

The decision by the European Commission confirmed a Reuters story last week.

"The proposed divestiture will ensure that competition in the industry is fully restored before the merger is implemented," EU Commissioner Joaquin Almunia said in a statement.

Western Digital promised to sell essential production assets for the manufacture of 3.5-inch disc drives, including a production plant, the Commission said, citing reduced competition in the sector after Seagate Technology bought Samsung Electronics' hard disk drive business.

The company also agreed to transfer or license intellectual property rights to the business to be sold off. It will also transfer staff and the supply of HDD components to the unit.

Western Digital cannot complete the deal until it has found a buyer for the unit, which will need to be approved by the regulator, the Commission said.

(Reporting by Foo Yun Chee; Editing by Rex Merrifield and Greg Mahlich)