SHENZHEN, CHINA, 20 APRIL 2011- Seagate and Samsung are to significantly expand and strengthen their strategic relationship by further aligning their respective ownership, investments and key technologies.
Seagate Technology, specializing in hard disk drives and storage solutions, has signed a definitive agreement with Samsung Electronics, a provider of digital consumer electronics and information technology to this end.
As per the agreement, Samsung will combine its hard disk drive (HDD) operations into Seagate and has also extended and enhanced the existing patent cross-license agreement between the companies.
Samsung will now provide Seagate with its semiconductor products for use in Seagate’s enterprise solid state drives (SSDs), solid state hybrid drives and other products.
Seagate will supply disk drives to Samsung for PCs, notebooks and consumer electronics and will also co-develop enterprise storage solutions with its partner.
Under the expanded agreement, Samsung will receive significant equity ownership in Seagate and has also signed a shareholder agreement under which an executive of Samsung will be nominated to join Seagate’s Board of Directors.
US $1.375 billion agreement
According to a release, the value of this agreement is about US $1.375 billion and this amount will be paid by Seagate to Samsung in the form of 50 per cent stock and 50 per cent cash.
Both companies expect to leverage this deal to better align their current and future product development efforts and roadmaps. They also look forward to accelerate time-to-market for new products and better address opportunities in markets including, cloud computing and solid state storage.
“We are pleased to strengthen our strategic relationship with Samsung in a way that better aligns both companies around technologies and products,” said Steve Luczo, Seagate chairman, president and CEO. “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.”
“Delivering value to the market and consumers is the primary goal of the extensive agreement announced today. Samsung looks forward to extending our existing strategic ties with Seagate, to deliver creative technology solutions for a broad diversity of consumer, business and industrial applications,” said Oh-hyun, Kwon, president of the semiconductor business of Samsung Electronics.
Sign up for MIS Asia eNewsletters.