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DISK DRIVE MAKER WESTERN DIGITAL WINS READ-RITE ASSETS

Disk drive maker Western Digital Corp said recently that a bankruptcy court had approved the sale to it of virtually all of former big rival Read-Rite Corp's assets for $95.4 million in cash.

Western Digital won out over a joint bid from data storage equipment rivals Seagate and Japan's Hitachi Ltd and Alps Electric Co Ltd after Read-Rite employees petitioned the court to rule in favor of Western.

Western Digital, of Lake Forest, California, said the acquisition provides the company with more capacity to produce recording head technologies -- the tiny computer parts that record and read digital data off of hard disk drives.

For the near-term Western is relying on merchant market suppliers to supply it with such technology, including 80 gigabyte disk drive recording heads that are now standard in consumer personal computers used for home entertainment.

The company said the assets include Read-Rite's wafer fabrication plant in Fremont, California and an option to buy its manufacturing operations in Thailand.

The Thailand operations have un-negotiated debt obligations of about $62 million, the company said. Western Digital said it intends to fund the acquisition through working capital.

The deal is expected to close within 10 days, subject to the terms of the sale order issued by the bankruptcy court.