Seagate Technology (NASDAQ: STX) has divested its system-on-chip (SoC) operations to a subsidiary of Broadcom (NASDAQ:AVGO) Inc., Avago Technologies International Sales Pte. Limited. The sale, which includes intellectual property and equipment, was finalized today for $600 million in cash.
The agreement, known as an Asset Purchase Agreement (APA), involves Seagate Technology and its subsidiaries, including Seagate Technology HDD (India) Private Limited and Seagate Singapore International Headquarters Pte. Ltd., collectively referred to as the Seagate Sellers. The Purchaser, Avago Technologies, is a Singapore-incorporated entity and part of the larger Broadcom corporation.
In addition to acquiring the SoC Operations, the Purchaser has committed to offering employment to certain Seagate Sellers’ employees who are currently engaged in the SoC Operations. This move ensures a smooth transition and continuity for the workforce involved.
Moreover, the deal includes a restructuring of an existing purchasing agreement between Seagate Technology LLC and the Purchaser. This restructuring outlines remedies available to each party in case of non-compliance with the agreement's terms, which includes the option to terminate the relationship before the expiration of the agreement.
The transaction is a strategic move for Seagate, a leader in data storage solutions, as it divests a part of its business portfolio. For Broadcom, a global technology company specializing in semiconductor and infrastructure software solutions, the acquisition represents a strengthening of its SoC capabilities.
This divestiture by Seagate is significant as it involves the sale of a portion of its operations that contribute to the design, development, and manufacturing of SoC products—a key component in many digital devices.
The information disclosed is based on a statement from an SEC filing, which provides verified details of the agreement between the involved parties. The transaction reflects ongoing changes and realignments within the tech industry, particularly in the semiconductor sector.
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