HTCH … Drops on TDK probe

1. Hutchinson Technology reported that it received a letter on July 26, 2016 from the Antitrust Division of the U.S. Department of Justice, which has opened an investigation relating to the sale of suspension assemblies for use in hard disk drives. The DOJ’s letter stated that neither HTI nor any HTI employee is currently a subject of the DOJ investigation, but that HTI may have documents and electronic information relevant to its investigation. HTI intends to fully cooperate with the DOJ’s investigation. With regard to the U.S. Federal Trade Commission’s review of the pending merger, HTI and TDK Corporation are providing additional information to the FTC and working cooperatively with the FTC to move the review forward. The FTC has not indicated when its review may be completed. Additionally, HTI is engaging in contingency planning for the potential of continued delays or impediments to the pending merger. Subject to certain conditions, the merger agreement may be terminated by HTI or TDK if the merger has not been consummated on or before November 1, 2016
2. Shares of Hutchinson Technology (HTCH), a manufacturer of parts for hard disk drives, are plunging after reports that its planned acquirer, TDK Corporation, is being probed by Japan’s Fair Trade Commission. In November of 2015, TDK Corporation and Hutchinson Technology jointly announced that they had entered into a definitive merger agreement under which TDK would acquire all of the outstanding shares of common stock of HTI. WHAT’S NEW: According to a report from the Japan Times out late Tuesday, the Japanese FTC searched the offices of TDK and NHK Spring on Tuesday on the suspicion they formed a price cartel for electronics parts for hard disk drives. According to the report, TDK Corporation and NHK Spring, both manufacturers of electronics components, are alleged to have set retail prices for suspension systems used for hard drives in personal computers and gaming consoles. PRICE ACTION: Shares of Hutchinson Technology are are down 40c, or 16%, to $2.06 in midday trading

Details of the original merger announced late last year can be found here.

An older SeekingAlpha article on the merger.