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Seagate gains Samsung HDD for Rs.6000 crore

Posted: 25 Apr 2011     Print Version  Bookmark and Share

Keywords:Samsung HDD business  Samsung-Seagate deal  solid-state drives  NAND flash memory 

Samsung Electronics Co. Ltd's HDD business is going to Seagate Technology plc for Rs.6,278.54 crore ($1.375 billion) in a 50:50 cash and stock mix.

The transaction will give Samsung 9.6 per cent ownership of Seagate as well as the right to nominate one of its officials to the Seagate board of directors.

Under the terms of the proposed deal, expected to close by the end of 2011, Samsung will provide NAND flash memory to Seagate for use in solid-state drives (SSDs) and hybrid drives while Seagate will provide disc drives to Samsung for use in PCs, notebooks and CE.

At the same time the two companies have agreed to extend and enhance an existing patent cross-licence agreement.

The strategic nature of the alliance with Samsung also means that Seagate expects to strengthen its relationship with SAE Magnetics (H.K.) Ltd, a subsidiary of TDK Corp.

"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."

The deal is expected to expand Seagate's customer access in China and Southeast Asia. Upon closing, Samsung will receive Seagate ordinary shares valued at Rs.3,139.27 crore ($687.5 million), equivalent to 4.52 crore shares, or approximately 9.6 per cent ownership of Seagate, which is based on Seagate's 30-day volume weighted average stock price prior to signing, plus Rs.3,139.27 crore ($687.5 million) in cash.

- Peter Clarke
  EE Times

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