Samsung Seagate $1.375 Billion Deal For HDD Division

Steve Jobs affirmed that we are entering the post-PC era. This means the laptops and desktops would soon be the items of past and solid state drives will replace hard disk drives as the primary means of storage. Samsung apparently believes the same and have sold their hard disk drive division to industry leader Seagate for $1.375 billion. The deal promises Samsung a 9% stake in Seagate and an opportunity to nominate a member in board of directors of Seagate. The deal has been settled with equal amounts of cash & shares.

The deal will be mutually beneficial. Samsung will provide the new generation solid state drives (SSD) with NAND flash memory to Seagate and Segate will continue to provide hard disk drives to Samsung's PC & Notebook divisions.
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The deal will be completed by the end of this year. Major elements of this deal include -

[*] 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

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