Scotts Valley, Calif. -
Samsung Technologies and Seagate entered into several strategic agreements
today that will give Samsung a 10 percent equity stake in Seagate, while
Seagate gains control of Samsung's hard drive operation.
Under the deal Seagate
will pay Samsung $1.4 billion to fold the hard drive unit into Seagate. The
payment will be made half in cash and half in Seagate stock. When completed
Samsung will own 9.6 percent of Seagate's stock. Samsung will also appoint an
executive to Seagate's board of directors.
Other aspects of the deal
involve a NAND flash memory agreement that has Samsung providing Seagate with
its flash products for use in Seagate's solid state drives. In return Seagate
will supply Samsung with hard disk drives for its PCs, notebooks and other CE
The two companies have
agreed to enhance existing cross-licensing agreements and expand cooperation to
co-develop enterprise level storage solutions.
Seagate executives said
the deal will give the company greater access to Asian markets and give them a
secure source of NAND flash for the expanding SSD market.
The agreement is expected
to close by the end of 2011.