China OKs Seagate-Samsung HDD Deal With Strong Conditions …

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MOC conditionally OKs Seagate-Samsung HDD deal

The Chinese Ministry of Commerce (MOC) on Monday conditionally endorsed the acquisition of Samsung Electronics’ HDD business by the United States’ Seagate Technology, clearing the path for the two brands’ alignment in China.

According to the MOC statement, Seagate should keep the Samsung brand as an independent competitor for at least one year and continue to expand production capacity under the Samsung brand within six months of the MOC ruling.

Seagate should not use its market status to substantially transform the current business model by forcing customers to purchase their HDD products, said the statement.

Specifically, the MOC prohibited Seagate from compelling TDK China Co., Ltd. to exclusively supply recording heads for hard drives to Seagate and its affiliated companies, or limiting its supplies to other HDD manufacturers.

Seagate promised to invest at least $800 million annually in R&D and renovation to offer more creative products and solutions to customers in the three years following the MOC ruling.

Seagate should appoint an independent fiduciary to supervise the fulfillment of its obligation, said the statement.

To read the full MOC statement (in Chinese only)