Seagate sucks up Samsung storage biz
Pays $1.375bn to boost market share to 40 per cent
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Seagate is taking over Samsung's hard disk operation, in a deal that will give the Korean giant almost 10 per cent of the erstwhile storage market leader.
The deal had been expected, with Seagate CEO Stepehn Luczo having already cleared his calendar for a mysterious three-month sojourn in the Far East.
The combined business will take around 40 per cent of the worldwide HDD market, making it a much weightier counter to Western Digital/Hitachi GST's 50 per cent.
Under yesterday's deal, Samsung will "combine" its HDD business into Seagate's, extend the firm's patent agreements, and provide NAND flash to Seagate.
At the same time, Samsung will take Seagate drives for its PC, notebook, and crucially perhaps, consumer products.
In return, Samsung gets the equivalent of $1.375bn from Seagate, half in cash, and half in Seagate stock. The stock element amounts to 9.6 per cent of Seagate's equity, and is enough to earn Samsung a seat on Seagate's board.
Seagate said the deal will significantly expand its business in China and Southeast Asia. Presumably Luczo's Asian holiday will include a significant amount of handshaking with customers.
The deal was flagged yesterday by the Wall St Journal. Samsung had wanted as much as $1.5bn for the business, but it was thought it would settle for less than $1bn. As it is, it has gained a little more than that, albeit with an ongoing link to the hard drive business.
Seagate, for its part, may have paid slightly more than it would have liked, but will be hoping Samsung will lubricate its entry into China and other markets. ®
COMMENTS
Should be the other way around
Seagate were once the leading hd manufacturers, but in recent years their reliability has dropped to a level that far from getting 4 years life out of their discs, they were failing before they were a year old.
Whereas, Samsung's discs have proven to be very reliable, I have one which is over 5 years old. Now I'll have to look for another manufacturer as I don't consider anything coming from Seagate as being up to job I expect from hard discs.
oh, nads.
My favourite HDD maker sells its business to my least-favourite HDD maker.
Spinpoints are fantastic. Seagates suck buttock.
Buy a few now
Get some F4s while you can, and sit on your hands for 2 years to see if Seagate incorporates Samsung reliability or if Spinpoint drives incorporate Seagate's "quality"... *sigh*
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