European Commission approves Seagate® acquisition of Samsung® hard disk drive division
The acquisition of Samsung Electronics hard disk drive division by Seagate Technology has been approved by the European Commission.
The European Commission said, “Although the merger will further consolidate markets that are already highly concentrated, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area or any substantial part of it.”
In April, Seagate Technology announced that it was buying Samsung HDD business for $1.4 billion in cash and stock. After the acquisition, Samsung will have 9.6% of the total shares. In 2010, Seagate and Samsung both combined and shipped 261.2 million units of HDD and held 40 percent of the HDD market share. Western Digital and Hitachi GST had 50 % market share, making it to the number one spot.
The main impact of the alliance between Seagate and Samsung will be in the 3.5-inch HDD market rather than 2.5-inch mobile HDD market, because Samsung is not a strong competitor in the latter. After this alliance, there will be three strong competitors in the 3.5-inch HDD market: Seagate Technologies, Western Digital, and Hitachi. In the 2.5-inch HDD market, there will be four vendors: Seagate, Hitachi, Western Digital, and Toshiba.
The acquisition between Samsung and Seagate Technologies means that Samsung will start supplying Seagate with NAND flash memory, which will be used in its solid state drives and other products.