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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.

“We are pleased to strengthen our strategic relationship with Samsung in a way that better aligns both companies around technologies and products. 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,” said Steve Luczo, Seagate chairman, president and chief executive.

These transactions and related strategic agreements will enable both companies to better align their current and future product development efforts and roadmaps, accelerate time-to-market for new products and position the companies to better address rapidly evolving opportunities in markets including, but not limited to, mobile computing, cloud computing and solid state storage.

The agreement has no financing contingencies, and is subject to customary closing conditions, including review by U.S. and international regulators. The transactions are expected to close by the end of calendar year 2011.

With the acquisition of  Samsung's HDD business by Seagate, takeover of Hitachi Global Storage Technologies by Western Digital, combination of HDD businesses of Toshiba and Fujitsu, there will be only 4 hard drive makers in the world: ExcelStor, Toshiba, Seagate and WD.

Tags: Seagate, HDD, Business, Samsung

Discussion

Comments currently: 9
Discussion started: 04/19/11 05:30:43 AM
Latest comment: 04/27/11 02:09:33 PM
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[1-7]

1. 
Aaaw maan! First Hitachi and then Samsung...
Both my preferred makers. Doesnt anyone want to make cool & silent HDDs anymore?
0 0 [Posted by: DIREWOLF75  | Date: 04/19/11 05:30:43 AM]
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2. 
Yeah this is really sad turn of events. Samsung was affordable quality and performance. Now im just left with WD who can charge whatever they want since Seagate is so hit and miss quality wise.
0 0 [Posted by: cashkennedy  | Date: 04/19/11 10:39:17 AM]
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3. 
What a fail. I gotta buy some HDDs soon, and hope they'll last me forever.
0 0 [Posted by: Harry Lloyd  | Date: 04/19/11 12:54:48 PM]
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4. 
I like WD drives so all is well.. but i will be picking up some more 2.5" Samsung portables as i find them to be the best QTY for money drives around.. USB 3.0 ones rock
0 0 [Posted by: vid_ghost  | Date: 04/19/11 08:43:36 PM]
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5. 
I just logged in, to write that now I will buy only WD drives, as Seagate is way too low quality for me, and somebody already wrote it!
I had about 10 seagate drives in my life and 9 of them needed repair, while none of my samsung drivers (had around 5 of them), and only one of my WD drives (had 10) needed repair.
Not only that, but one of the seagate drives, has been already exchanged 3 or 4 times for brand new, which breaks soon after exchange.
Fortunately SSD drives are slowly taking over the market, and they are manufactured by far more companies, than traditional HDDs.
0 0 [Posted by: knedle  | Date: 04/20/11 03:14:29 AM]
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- collapse thread

 
actually SSDs are SOLD by more companies but made by only a few... its called rebranding.
0 0 [Posted by: taltamir  | Date: 04/21/11 02:37:32 PM]
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Isn't it more like they are made by different companies, but some components (NAND Flash in this example) are made by only a few?
0 0 [Posted by: knedle  | Date: 04/27/11 02:09:33 PM]
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6. 
Maybe now this will actually make Seagate good again. There was a time when Seagate was top notch, but in recent years their quality as really gone down hill.
0 0 [Posted by: SteelCity1981  | Date: 04/20/11 04:06:23 AM]
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7. 
Damn.... This is a sad day.
0 0 [Posted by: george1976  | Date: 04/21/11 10:22:46 AM]
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