Critical.
Authoritative.
Strategic.
Subscribe to CIO Magazine »

China approves conditionally Seagate acquisition of Samsung HDD unit

China said the deal would limit competition in the hard disk drive market

China has approved Seagate Technology's proposed acquisition of Samsung Electronics' hard disk drive (HDD) business, but with conditions, including measures to minimize potential price increases after the deal, the country's Ministry of Commerce said on Monday.

In April, the two companies announced that Samsung would sell its HDD business to Seagate for US$1.4 billion. The announcement came a month after rival Western Digital said it would acquire the hard drive business of Hitachi for $4.3 billion in cash and stock. If the acquisitions are completed, Seagate, Western Digital and Toshiba will be left as the three main players in the hard drive market.

China's Ministry of Commerce said in a public notice that Seagate's acquisition of Samsung's HDD business would weaken competition in the market. Seagate has a 33 percent share of the global hard drive disk market, while Western Digital's share is 29 percent, and Samsung has a 10 percent share, according to the Ministry of Commerce.

The Ministry, however, approved the deal after both Seagate and Samsung agreed to conditions to limit the acquisition's impact on the market. Seagate will be required to keep the Samsung brand for at least one year, and expand the production capacity of Samsung's HDD business unit for six months.

Under the conditions, Seagate must also establish an independent company that will sell Samsung's HDD products. To ensure prices for Samsung's HDD products remain competitive, Seagate cannot interfere or exchange sensitive information with the Samsung division on pricing, product volumes, or business practices.

Seagate can after one year apply to remove the conditions, according to the Ministry of Commerce.

The European Commission approved the acquisition plan in October

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: European Commission, Hitachi, Samsung, Samsung Electronics, Seagate, Seagate Technology, Technology, Toshiba, Western Digital
References show all

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
Users posting comments agree to the CIO comments policy.
Login or register to link comments to your user profile, or you may also post a comment without being logged in.
Related Coverage
Related Whitepapers
Latest Stories
Community Comments
Tags: business issues, Components, government, memory, mergers and acquisitions, Regulation, Samsung Electronics, seagate
Latest Blog Posts
Whitepapers
  • Managing IBM License Complexity
    IBM provides thousands of products in its portfolio and uses a variety of license models, contract terms and conditions. These license models can be very complex, causing frequent confusion for organisations trying to grasp the concepts while maintaining license compliance. While at first IBM licensing may seem incomprehensible, some education on the license models and licensing scenarios will help minimise the confusion. In addition, a more automated approach to managing licenses enables organisations to gain control, reduce ongoing software costs and minimise license liability risks. Read on.
    Learn more »
  • Revolutionizing Enterprise Storage Infrastructure with Enterprise Flash Technology
    Businesses increasingly rely on datacenters to provide access to services, applications, and data. As demand rises and applications grow in complexity, datacenter infrastructure must provide tremendous capacity and rapid access to information in order to keep pace with business priorities. Read on.
    Learn more »
  • Seven Steps to Effective Data Governance
    Creating a framework to ensure the confidentiality, quality, and integrity of data – the core meaning of data governance – is essential to meet both internal and external requirements, such as financial reporting, regulatory compliance, and privacy policies. At its best, data governance roots out risk – both business and compliance risk – by increasing oversight. This white paper provides seven steps for taking such an approach, concluding with a real world example, taking an incremental approach using a repeatable framework that is a practical, proven strategy that any size organization can implement to suit their immediate and long-term needs and budget.
    Learn more »
All whitepapers
rhs_login_lockGet exclusive access to Invitation only events CIO, reports & analysis.