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The Sale That Wasn't a Sale

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Press releases can be funny beasts. Some deals are simple:

No fuss, no muss; just announce the deal and move on. Oracle's road to completion was long and twisty, and I expect an even tougher path ahead for the AT&T-Mobile proposal, but at least they were presented with elegant clarity.

No so with today's big deal. Seagate Technology (Nasdaq: STX  ) is, for all intents and purposes, buying the hard-drive business of Samsung Electronics, but the two companies take great care not to call it an acquisition, a sale, or even a spinoff. Instead, "Seagate and Samsung Announce Broad Strategic Alignment," and then it's off to the races in pure legalese.

The agreement will "expand and strengthen" the "strategic relationship" betwixt the two, including cross-licensing and component supply contracts going both ways. Samsung gets a seat on Seagate's board, along with a nearly 10% ownership stake in the hard drive maker.

Ah, but Samsung is selling its hard drive division in every sense of the word, except that the companies won't call it exactly that: Seagate is sending $1.375 billion in cash and stock to Samsung, in return for the Korean giant combining that operation into Seagate.

So the whole package is positioned as more of a partnership than a sale. Yet assets are moving one way and money the other, which is what I'd call a "sale."

Is this a cultural matter of saving face in the great Far Eastern tradition? If so, Western Digital (NYSE: WDC  ) may have broken some taboos by being blunt about its buyout of Hitachi's (NYSE: HIT  ) Global Storage segment: "Western Digital to Acquire Hitachi Global Storage Technologies," blared that headline.

Well, whatever -- I guess a rose by any other name wouldn't smell as sweet to Samsung and Seagate. So here's a blockbuster partnership to counter the Western Digital/Hitachi beast.

I'd scream bloody murder about all this in, say, the mobile services sector where competition is a fragile and precious thing -- but industry consolidation is downright natural in the highly commoditized storage sector.

It's getting easier to follow the storage industry as the players boil down to a handful of giants. The best way to follow these game-changing deals through their consummation is to add the stocks involved to your watchlist. Get started right now:

Fool contributor Anders Bylund holds no position in any of the companies discussed here. AT&T is a Motley Fool Inside Value selection. The Fool owns shares of Oracle, Texas Instruments, and Western Digital. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.

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