Seagate to Add Samsung Disk-Drive Business in Strategic Alliance

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 companies’ existing patent cross-licensing agreement, Samsung’s supply of flash memory chips to Seagate for its enterprise solid state drives, and Seagate’s supply of disk drives for Samsung’s PCs, notebooks and consumer electronics.

More on the deal at the Los Angeles Times.

Samsung Mulls Sale of Hard-Disk-Drive Business: Report

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.

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