Electronics major Samsung has signed a deal to sell off its HDD business to Seagate Technologies for a reported sum of nearly $1.38 billion
The sale is seen as key move by Samsung to steer itself clear of the highly competitive HDD business which works on low margins and focus its attention on the memory chip business.
The deal comes at a time when consolidation is taking place in the HDD industry with Western Digital Corp planning to buy out the HDD business of Hitachi for a sum of around $4.3 billion.
Many analysts believe that the deal is expected to give market leader Seagate a stronger footing in challenging the forthcoming threat from Western Digital besides giving it access to Samsung's strong product line.
After the deal Seagate will hold nearly forty percent of the world HDD market and it would also be able to significantly expand its presence in many Asian countries including China where Samsung has a strong presence.
Commenting on the deal which is a part of broader strategic alignment with Samsung, the CEO of Seagate, Steve Luczo mentioned “With these agreements, we expect to achieve greater scale and deliver a broader range of innovative storage products and solutions to our customers, while facilitating our long-term relationship with Samsung”.