Seagate acquires Samsung’s HDD business
Dubai, December 27, 2011
Seagate Technology, a world leader in hard disk drives and storage solutions, has closed the transaction to acquire the hard disk drive (HDD) business of Samsung Electronics, a major digital consumer electronics and IT firm.
Under the terms of the transaction, Seagate has gained select elements of Samsung's HDD business, including assets, infrastructure and employees that enable Seagate to drive scale and innovation. These assets include Samsung's leading M8 product line of high-capacity, 2.5-inch HDDs.
Samsung employees joining Seagate include a number of senior managers and design-engineering employees from Samsung's Korea facility, who will focus on development of small form-factor products for the mobile computer market.
N Y Park, senior vice president and general manager, will oversee Seagate's product development activities in Korea and serve as country manager of the Korea design center, reporting to Bob Whitmore, Seagate's executive vice president and CTO.
"Together, Seagate and Samsung have aligned our current and future product development efforts and roadmaps in order to accelerate time-to-market efficiency for new products and position us to better address the increasing demands for storage," said Steve Luczo, Seagate chairman, president and CEO.
"It is an exciting time in the industry with rapidly evolving opportunities in many markets including mobile computing, cloud computing, and solid state storage."
This transaction was announced in April along with a series of other agreements between Seagate and Samsung.
Seagate is supplying disk drives to Samsung for PCs, notebooks and consumer electronics devices. Samsung is supplying its market-leading semiconductor products for use in Seagate's enterprise solid state drives (SSDs), solid-state hybrid drives and other products.
The companies have also extended and enhanced their existing patent cross-license agreement and have expanded cooperation to co-develop enterprise storage solutions.
"The strategic relationship will open new opportunities for the two companies by mutually complementing each other's creative technology solutions for a broad diversity of IT applications," said Oh-Hyun Kwon, vice chairman of Device Solutions of Samsung Electronics.
The combined value of these transactions and agreements is approximately US $1.4 billion, consisting of 45,239,490 Seagate ordinary shares and the remaining balance settled in cash. In addition, Samsung will designate a nominee to join Seagate's Board of Directors.
Seagate does not presently expect significant restructuring costs and expects to achieve considerable reductions in overall operating expenses for the combined business while minimizing the integration costs.
As previously stated, Seagate expects that the transactions and agreements will be meaningfully accretive to non-GAAP diluted earnings per share and cash flow in the first full year following the closing. Seagate will provide additional financial information for the combined company on its fiscal second quarter conference call in late January. – TradeArabia News Service