"it's about reducing overhead for the merged entity that used to be separate companies WD and HGST."
And the resistance is about preventing HGST reliability fall to WD levels (they will), or that there would effectively be only 2 makers of commodity HDDs worldwide(*), both of whom are scaling back on warranties at the same time as reliability is plummeting and who are both increasingly reliant on the same single-sources for components.
If I was the chinese I'd be holding this line until SSDs are cheap enough that they're giving spinning media some real competition. It's almost there.
The HDD market in the last 5 years (Since the Thai Floods) looks amazingly like the RAM market did in the 5-10 years following the 1992 Sumitomo Fire and for much the same reason - futures traders got in on the action and screwed up a technical market in their pursuit of limitless profit.
The difference between then and now is that unlike RAM (where multiple fabs and plastics makers were able to come onstream and kill the market manipulators), HDDs are mechanically fiddly and not easy to fabricate - platters almost all come from one source, heads from another. The answer is more solid-state storage and that's happening, although not quite as fast as some of us had envisaged (3D fabs will probably change that daramatically).
(*) Toshiba aren't shipping enough to affect prices.