Seagate is one of the leading hard drive manufacturers and to extend its leadership in the business they’ve managed to buy Samsung’s ailing hard drive business. However, this is not a regular buyout as it stretches on number of other fronts.
Under the agreement, Samsung and Seagate will “extend and enhance” existing patent cross-license agreement; Seagate will supply HDDs to Samsung for their PCs, laptops; co-develop enterprise storage solutions; and Samsung will provide Seagate NAND flash memories for use in Seagate SSD products.
The total value of the transaction comes to around US$1.375 billion that will be paid in stock and cash. Additionally, Samsung will also gain about 9.6% ownership stake in Seagate and a place on the Board of Directors.