Seagate Technology have announced today that they are entering into a ‘strategic partnership’ with Samsung Electronics, purchasing the hard drive disk section of the business for a very cool $1.375 billion in cash and shares.
This deal is another major consolidation after Western Digital recently announced that they were buying Hitachi Global Storage Technologies for a staggering $4.3 billion. This acquisition gives Western Digital almost half of the market in hard disk drives, double Seagates percentage, according to iSuppli.
Seagate are clearly trying to catch up, by adding the 10 percent share of the market held by Samsung to the 30 percent it already maintains.
Seagate and Samsung will enhance their cross licensing, research and development collaboration and Samsung are placing an executive on Seagate’s board. Samsung will supply Seagate with semiconductor products and Seagate will in turn supply Samsung with hard disk drives for personal computers, notebooks and other devices.
The companies issued a statement which read “The transactions and agreements significantly expand Seagate’s customer access in China and Southeast Asia.”
Seagate will give Samsung $687.5 million worth of shares, amounting to 9.6 percent in the company, and will pay the rest in cash. The deal is planned to close by the end of 2011, pending regulatory approval.
KitGuru says: Several big players now in this market and no one else.