Seagate (STX), Samsung Enter $1.38B Technology Agreement; Samsung to Gain 9.6% Stake in Seagate

Seagate Technology plc (Nasdaq: STX) and Samsung Electronics Co., Ltd., have entered into a definitive agreement under which Seagate and Samsung will significantly expand and strengthen their strategic relationship by further aligning their respective ownership, investments and key technologies.

Key parts of the agreement:

• 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

Seagate expects these transactions and agreements to be meaningfully accretive to non-GAAP diluted earnings per share and cash flow within the first full year following the closing.

Under the terms of the agreement, Samsung will receive consideration consisting of 50% Seagate ordinary shares and 50% cash. Upon closing, Samsung will receive Seagate ordinary shares valued at $687.5 million (45.2 million shares, or approximately 9.6% ownership of Seagate, which is based on Seagate’s 30-day volume weighted average stock price prior to signing), plus $687.5 million in cash. Samsung will have a right to designate a nominee to join Seagate’s Board of Directors following closing.

Morgan Stanley & Co. Incorporated served as financial advisor and Wilson Sonsini Goodrich & Rosati, Professional Corporation served as legal advisor to Seagate in connection with the transaction. Allen & Company LLC served as financial advisor and Paul, Hastings, Janofsky & Walker LLP served as legal advisor to Samsung.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Etsy upgraded to buy at BofA on durable growth, buyback potential
• ACRES Commercial Realty says labor dispute is hindering hotel sale
• Wolfe remains "broadly bullish on AI semis stocks", names Top Pick