Samsung and Seagate on Tuesday lived up to rumors by striking a deal for their storage businesses. Under the terms, Samsung will fold its hard drive business into Seagate’s while Seagate will in turn give Samsung drives for computers and other devices. Samsung will bring its flash memory into play and feed not just Seagate’s enterprise solid-state drives but also hybrid drives and “other products.”
Corporate aspects of the deal will see the two work more closely together on enterprise storage as a whole as well as widen their patent cross-licensing deals. Samsung receives some of the best of the deal as it gets both $1.38 billion from Seagate in cash and stock as well as a substantial equity stake in the American company.
The two plan for the deal to wrap up by the end of 2011.
Both companies had major incentives to complete the deal. Seagate sees the deal as giving it access to a southeast Asian market that was previously hard to reach. Getting Samsung flash will also give it a fast track to making home-ready solid-state drives that it has previously considered impractical.
