ACCC gives Seagate-Samsung green light

ACCC gives Seagate-Samsung green light

Summary: The Australian Competition and Consumer Commission (ACCC) has released its review on Seagate's proposed acquisition of Samsung's hard disk drive (HDD) business, and given it the green light.

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The Australian Competition and Consumer Commission (ACCC) has released its review on Seagate's proposed acquisition of Samsung's hard disk drive (HDD) business, and given it the green light.

(Too much or too little? image by Kenny Louie, CC BY 2.0)

The informal review, spotted earlier by iTechReport, had been put in place to determine whether removing Samsung from the HDD market would lessen healthy competition. Seagate announced its intention to purchase Samsung's HDD business in April this year for US$1.37 billion after Western Digital bought up Hitachi's storage unit for US$4.3 billion.

At the time of the Samsung acquisition, Barclays Capital analyst Ben Reitzes predicted that it would be a net positive for the HDD market. However, in its review, the ACCC considered whether the acquisition would have a negative effect.

Its view was that Samsung was likely too small a player to make much difference to competition. It stated that: "Samsung is not a leader of innovation or price discounting in the HDD industry, and the removal of Samsung from the relevant HDD markets is unlikely to result in a substantial lessening of competition".

However, the acquisition does put Seagate at better odds of catching up with its arch-rival Western Digital. Estimates for market share last month showed Samsung-Seagate with 41 per cent of market share, and Western Digital-Hitachi with 48 per cent. Ignoring the acquisitions, market share would have been 31 per cent and 32 per cent for Seagate and Western Digital, respectively.

The only other remaining HDD company is Toshiba.

Despite being hit by the Thailand floods, where a significant amount of its manufacturing occurs, Seagate has been relatively upbeat, releasing its solid-state hybrid drive, the Momentus XT, despite its supply constraints.

Meanwhile, Western Digital has restarted production in the region again.

Topics: Samsung, Government, Government AU, Mobility, Storage

Michael Lee

About Michael Lee

A Sydney, Australia-based journalist, Michael Lee covers a gamut of news in the technology space including information security, state Government initiatives, and local startups.

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