A Rival Could Acquire Seagate Technology - Rumours.
Samsung, Toshiba or WD May Take Over Seagate
by Anton Shilov
One of competitors is rumoured to be considering acquisition of Seagate Technology. While the deal is not too likely to happen due to various reasons, if this will be made, it will not only be the largest technology acquisition in 2010, but it will also create the new world's largest maker of hard disk drives (HDDs)
After a number of private equity firms decided not to acquire Seagate Technology, which this year lost hard drive volume leadership to its arch-rival Western Digital, the New York Post news-paper reported that a rival could acquire Seagate in a bid to create the world's largest maker of hard disk drives. At present Seagate has market capitalization of $6.5 billion and if the deal really happens, the value of the transaction could be $7.8 billion of not higher.
There are rumours that Toshiba Corp., one of the world's largest maker of flash memory and a leading producer of hard drives, is the company considering acquisition of Seagate. The company already bought Fujitsu Ltd.'s hard drive business in 2009 and now the company may be interested to further expand its market share.
"It is possible, but the probability is very low. It is more likely that the rumors are just a way to signal bidders that there are other interested parties, and the time to make a deal is now. It is a game. Steve [Luczo, the chief executive officer of Seagate] is not there to keep the job as a CEO. He is not going to sit idle until the deal is done. He wants to make money," said Kaushik Roy, an analyst with Wedbush Securities, in an interview with eWeek web-site.
Other potential bidders are Hitachi Global Storage Technologies, Samsung Electronics, Western Digital. The problem is that Hitachi wants to spin off its hard disk drives business unit and is preparing an IPO. Western Digital is also unlikely to acquire Seagate since the company is not known for large takeovers of competitors, unlike Seagate itself.
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