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Seagate strengthens relationship with Samsung

Anuradha Shukla | April 20, 2011
Further alignment of respective ownership, investments and key technologies.

SHENZHEN, CHINA, 20 APRIL 2011- Seagate  and  Samsung are to significantly  expand   and  strengthen  their  strategic  relationship  by  further  aligning  their  respective  ownership, investments and key technologies.
Seagate Technology, specializing in hard disk drives and storage solutions, has signed a definitive agreement with Samsung Electronics, a provider of  digital  consumer  electronics  and  information  technology to this end.

As per the agreement, Samsung will combine its hard disk drive (HDD) operations into Seagate and has also extended and enhanced the existing patent cross-license agreement between the companies.

Samsung  will  now provide  Seagate  with  its  semiconductor  products  for  use  in  Seagate’s  enterprise  solid  state  drives  (SSDs),  solid  state  hybrid   drives  and  other  products.
Seagate  will  supply  disk  drives  to  Samsung  for  PCs,  notebooks  and  consumer  electronics and will also co-develop  enterprise  storage  solutions with its partner.

Under the expanded agreement, Samsung will receive significant  equity  ownership  in  Seagate and has also signed a shareholder  agreement  under  which  an  executive  of  Samsung  will  be  nominated  to  join  Seagate’s  Board  of  Directors. 

US $1.375 billion agreement

According to a release, the value of this agreement is about US $1.375  billion and this amount will  be  paid  by  Seagate  to  Samsung  in  the  form  of  50 per cent  stock  and  50 per cent  cash.     

Both companies expect to leverage this deal to better align their   current and future product development efforts and roadmaps. They also look forward to accelerate  time-to-market  for  new   products  and   better  address  opportunities  in  markets   including,   cloud  computing  and  solid  state  storage.  

“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. “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.”   
“Delivering  value  to  the  market  and  consumers  is  the  primary  goal  of  the  extensive  agreement   announced  today.    Samsung  looks  forward  to  extending  our  existing  strategic  ties  with  Seagate,  to  deliver   creative  technology  solutions  for  a  broad  diversity  of  consumer,  business  and  industrial  applications,”   said  Oh-hyun,  Kwon,  president  of  the  semiconductor  business  of  Samsung  Electronics.     


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