South Korea's Samsung Electronics has agreed to sell its hard-disc drive business to US firm Seagate Technology for $1.375 billion in cash and stock.
The deal would help Samsung, which held about a 10.7% share of the global hard-disc drive (HDD) market in the fourth quarter, unload a money-losing business and focus on more profitable areas.
Samsung, the world's largest maker of memory chips and flat-screen televisions, achieved a record second-quarter operating profit of 5.01 trillion won ($4.6 billion) last year but its earnings have been falling since then.
Samsung said it would receive a 9.6% stake in Seagate and $687.5m in cash in return for transferring its HDD unit. The two companies also agreed on a set of strategic partnerships.
Samsung will supply NAND flash memory chips to Seagate's solid state drives and other businesses. The US company will provide disk drives to the South Korean giant. A Samsung executive will join Seagate's board.
The deal would help Seagate strengthen its competitiveness against US rival Western Digital. In March, Western Digital agreed to buy Hitachi's hard-disc-drive business for about $4.3 billion in cash and stock, a deal that created a dominant player with a nearly 50% market share.
Disk drives have been a mainstay of the computer industry since the early 1980s. But the industry is under pressure from the success of Apple's iPad and other tablet computers, which store data on flash-memory chips.
