Seagate to acquire Samsung HDD division for $1.375 B

Samsung just announced that it's selling its hard disk drive-manufacturing division to Seagate for $1.375 billion worth of cash and stocks.

In a press release, the Korean electronics giant and the market leader in hard disk drives announced the ownership and key technologies alignment.

The deal guaranteed Samsung at least 9.6 percent of Seagate. The agreement included:

-Samsung combining its hard disk drive (HDD) operations into Seagate

-Extending and enhancing the existing patent cross-license agreement between the companies

-A NAND flash memory supply agreement under which Samsung will provide Seagate with its market-leading semiconductor products for use in Seagate’s enterprise solid state drives (SSDs), solid state hybrid drives and other products

-A disk drive supply agreement under which Seagate will supply disk drives to Samsung for PCs, notebooks and consumer electronics

-Expanded cooperation between the companies to co-develop enterprise storage solutions

-Samsung receiving significant equity ownership in Seagate

-A shareholder agreement under which an executive of Samsung will be nominated to join Seagate’s Board of Directors

According to the press release, the combined value of these transactions and agreements is approximately $1.375 billion USD, which will be paid by Seagate to Samsung in the form of 50% stock and 50% 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 president and CEO in the press statement.