Seagate to acquire Samsung hard drive business

Stephen Withers
Wednesday, 20 April 2011 08:54

Two of the leading manufacturers of hard drives and other storage devices are teaming up. Samsung's disk drive operations will be transferred to Seagate as part of a $US1.375 billion deal.

Seagate is to acquire Samsung's hard disk drive business. The news follows last month's announcement that Western Digital would acquire Hitachi Global Storage Technologies for $US4.3 billion.

The Seagate/Samsung agreement includes other elements, including the cross supply of products. Seagate will supply Samsung with hard drives for use in computers and consumer electronics, while Samsung will supply NAND flash memory parts to go into Seagate solid state drives, hybrid drives and other products.

The two companies will extend their patent cross-licensing agreement, and will co-develop enterprise storage systems. They have been collaborating on product development since last August.

Half of the $US1.375 billion will be paid to Samsung as Seagate shares (approximately 9.6% of the company), and a Samsung representative will be granted a seat on the Seagate board.

"We are pleased to strengthen our strategic relationship with Samsung in a way that better aligns both companies around technologies and products," said Steve Luczo, Seagate chairman, president and CEO. "With these agreements, we expect to achieve greater scale and deliver a broader range of innovative storage products and solutions to our customers, while facilitating our long-term relationship with Samsung."

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