Seagate and Samsung Join Forces

By Cindy Waxer April 19, 2011

Seagate and Samsung are joining forces to become a considerable contender in the hard disk drive space. The hard disk drive manufacturer and digital consumer electronics titan, respectively, have entered into an agreement under which Seagate and Samsung will pool resources.

The $1.38 billion deal sees Samsung combining its hard disk drive operations into Seagate, Samsung providing Seagate with its semiconductor products for use in Seagate’s solid state drives, and a shareholder agreement under which a Samsung exec will be nominated to join Seagate’s Board of Directors.

The agreement will be paid by Seagate to Samsung in the form of 50 percent stock and 50 percent cash.

“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, in a statement. “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.”

Seagate and Samsung aren’t the only hard disk drive players to pool resources. In early March, Seagate competitor Western Digital made news by acquiring Hitachi Global Storage Technologies (Hitachi GST), a wholly-owned subsidiary of Hitachi, Ltd., in a cash and stock transaction valued at approximately $4.3 billion.

Under the deal, Hitachi will own approximately ten percent of Western Digital shares outstanding after issuance of the shares and two representatives of Hitachi will be added to the WD board of directors at closing.

Earlier this year, reported that Samsung unveiled three new lines of external hard disk drives, including two portable models and a desktop drive. Each and every one relies on the new USB 3.0 port standard, which promises data transfer rates of up to 5Gb/s.

The portable drives come with up to 1TB of capacity, boast a wave-like matte finish to conceal dirty fingerprints, curved sides for a comfortable grip, and will be available in four colors: brown black, noble beige, clay orange, and mist gray.

Edited by Jennifer Russell

TechZone360 Contributing Editor

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