Back then, it was called a "broad strategic alignment." Today, it's called an "acquisition."
Whatever you want to call it, Seagate Technology (Nasdaq: STX ) has now completed its planned acquisition of Samsung's hard disk drive (HDD) business after eight long months. The deal was initially announced in April under the first moniker, with fellow Fool Anders Bylund aptly calling out the duo in their semantic dance.
The $1.4 billion deal gives Samsung roughly 45.2 million shares, or roughly 9.6% ownership, of Seagate, with the difference settled up in cash. Samsung will also get to pick a nominee for Seagate's board. As if we needed more evidence that solid-state drives (SSD) are the future, the acquisition will strengthen Seagate's enterprise SSD and SSD hybrid drive offerings through Samsung's semiconductor products. Seagate will supply drives to Samsung for use in its PCs and other devices.
The pair has also extended its existing patent cross-licensing agreement and will work together to develop enterprise-storage offerings, which is where Fusion-io (NYSE: FIO ) is also trying to make a name for itself.
Seagate expects the transaction to be accretive to non-GAAP earnings in the first full year after today's closing. The company also doesn't foresee significant restructuring costs and hopes to capture some cost-saving synergies.
A month before this deal was announced earlier this year, Western Digital (NYSE: WDC ) led the way by pouncing on Hitachi's (NYSE: HIT ) HDD business. That transaction is still in the works, but it recently cleared European Union regulatory muster. With the heavyweights in the sector quickly consolidating, smaller SSD specialists such as OCZ Technology (Nasdaq: OCZ ) and STEC (Nasdaq: STEC ) may be going up against growing Goliaths.
The hard-drive industry has been awash with troubles since the floods in Thailand, although Seagate escaped mostly unscathed. The ripples from the overflow have spread throughout the PC industry, leading Intel (Nasdaq: INTC ) to cut its guidance recently because of HDD shortages.
With all the consolidation that's been happening in the sector, I wouldn't be surprised if some of the smaller players end up getting swallowed by the swelling titans -- but probably not until they have sufficient time to digest their latest meal.
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