Samsung merges HDD operation with Seagate

In a move that could help counter the effect of Western Digital’s acquisition of Hitachi, Samsung is also merging its storage division with Seagate. It’s an unlikely partnership but should be interesting to see if it can mount a good defense against WD.

Seagate will now be running Samsung’s HDD operations and merging it with its own storage solutions. On the other hand, Samsung will have partial ownership of Seagate.

• 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

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.

See full release here.