Confirming an earlier report, Samsung Electronics and Seagate Technology announced a $1.38 billion deal under which Samsung will combine its hard-disk drive operations into Seagate in exchange for cash consideration and a nearly 10 percent stake in the company.
Other terms of the strategic alliance include extension of the companiesâ€™ existing patent cross-licensing agreement, Samsungâ€™s supply of flash memory chips to Seagate for its enterprise solid state drives, and Seagateâ€™s supply of disk drives for Samsungâ€™s PCs, notebooks and consumer electronics.
More on the deal at the Los Angeles Times.
Further consolidation among hard-disk-drive makers may be in the offing, with Samsung Electronics reportedly looking to sell its hard-disk unit. A source familiar with the matter tells The Wall Street Journal that Seagate Technology is a potential buyer of the Samsung business. Seagate maintains a dominant share of the global market for enterprise-class HDDs; while Samsung claims an 11% share of the overall global HDD market, the hard-disk-drive business is a money-losing venture for the company.
In March, Western Digital announced its planned acquisition of Hitachi Global Storage Technologies for $4.3 billion in cash and stock, creating a company with a nearly 50% share of the global HDD market. Samsung, the Journal reports, is looking to sell its HDD unit for $1.5 billion, but may accept a deal for under $1 billion.