Seagate to Acquire Hard Drive Business of Samsung Electronics

From X-bit Labs: Seagate Technology, a leading manufacturer of hard disk drives (HDDs) and storage solutions, and Samsung Electronics, a leading consumer electronics and semiconductor company, on Tuesday announced that they had entered into a definitive agreement under which Seagate will acquire hard drive business of Samsung. The two companies will also sign a broad cross-licensing and collaboration agreements.

Under the terms of the agreements, Samsung will provide Seagate with its semiconductor products for use in Seagate’s enterprise solid state drives (SSDs), solid state hybrid drives and other products, whereas Seagate will supply disk drives to Samsung for desktops, notebooks and consumer electronics. The companies will also expand cooperation between the companies to co-develop enterprise storage solutions.

In connection with its strategic alliance with Samsung, Seagate expects also to strengthen its relationship with TDK Corp./SAE Magnetics. Together, these transactions and agreements broaden a strategic relationship between Seagate and Samsung that began with a joint development agreement announced in August 2010.

The combined value of these transactions and agreements is approximately $1.375 billion, which will be paid by Seagate to Samsung in the form of 50% stock and 50% cash. Upon closing, Samsung will receive Seagate ordinary shares valued at $687.5 million (45.2 million shares, or approximately 9.6% ownership of Seagate, which is based on Seagate’s 30-day volume weighted average stock price prior to signing), plus $687.5 million in cash.

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