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 products.
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.