Apr 202011

Samsung has decided to divest itself of its hard disk drive division and transfer it to Seagate, which has reached an agreement. The operation has cost 1.375 billion dollars and an exchange of favors.

The purpose of the Korean is to return the money to invest in areas where it can then “promising” market. It ‘possible that Samsung will focus on the segment of the TV or SSD memory chips for example, taking into account that the results reported show a net profit of 2.67 billion dollars in the first quarter of 2011, down 34% over one year. Samsung makes official the acquisition of the hard drives from Seagate, providing some details.

The transaction amounted to 1.375 billion dollars, of which 687.5 million dollars in shares (and this represents 9.6% of the share of Seagate), and the rest in cash. By contrast, Samsung gets a seat at the board of directors of Seagate. In fact, Samsung will continue to be present in the sector of hard disks, as will work in collaboration with Seagate in the development of future products. It is expected that the Korean company provides its partners with new NAND flash memory chips for the next SSD Seagate.

On the other hand, Seagate hard disk to provide Samsung for its laptops. With this acquisition, Seagate will increase its market share in the HDD sector from 29% to 40%. However, Western Digital will be leading the industry with the 50% market share, expanding with the acquisition of the hard disk from Hitachi. The American Antitrust and international, now, will validate the agreement to be completed by the end of 2011. Next year then, the sector will have only two players (Seagate and Western Digital) which together account for 90% of the market, Toshiba and Fujitsu share the rest. We hope that the final consumer will not be harmed by this centralization.

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