Seagate 2010 Annual Report Download - page 33

Table of Contents
Risks Associated with Future Strategic Alliances, Joint Ventures or Investments
—We may not be able to identify suitable strategic alliances,
acquisitions, joint ventures or investment opportunities, or successfully acquire and integrate companies that provide complementary
products or technologies.
Our growth strategy may involve pursuing strategic alliances with, making acquisitions of, forming joint ventures with or making
investments in other companies that are complementary to our business. There is substantial competition for attractive strategic alliance,
acquisition, joint venture and investment candidates. Accordingly, we may not be able to identify suitable strategic alliances, acquisition, joint
venture, or investment candidates. Even if we can identify them, we cannot assure you that we will be able to partner with, acquire or invest in
suitable candidates, or integrate acquired technologies or operations successfully into our existing technologies and operations. Moreover, our
ability to finance potential strategic alliances, acquisitions, joint ventures or investments will be limited by our high degree of leverage, the
covenants contained in the indentures that govern our outstanding indebtedness, and any agreements governing any other debt we may incur.
If we are successful in forming strategic alliances or acquiring, forming joint ventures or making investments in other companies, any of
these transactions may have an adverse effect on our results of operations, particularly while the operations of an acquired business are being
integrated. It is also likely that integration of acquired companies would lead to the loss of key employees from those companies or the loss of
customers of those companies. In addition, the integration of any acquired companies would require substantial attention from our senior
management, which may limit the amount of time available to be devoted to our day-to-day operations or to the execution of our strategy.
Growth by strategic alliance, acquisition, joint venture or investment involves an even higher degree of risk to the extent we combine new
product offerings and enter new markets in which we have limited experience, and no assurance can be given that acquisitions of entities with
new or alternative business models will be successfully integrated or achieve their stated objectives.
Furthermore, the expansion of our business involves the risk that we might not manage our growth effectively, that we would incur
additional debt to finance these acquisitions or investments, that we may have impairment of goodwill or acquired intangible assets associated
with these acquisitions and that we would incur substantial charges relating to the write-off of in-process research and development, similar to
that which we incurred in connection with several of our prior acquisitions. Each of these items could have a material adverse effect on our
financial condition and results of operations.
In addition, we could issue additional ordinary shares in connection with future strategic alliances, acquisitions, joint ventures or
investments. Issuing shares in connection with such transactions would have the effect of diluting your ownership percentage of the ordinary
shares and could cause the price of our ordinary shares to decline.
Risk of Intellectual Property Litigation
—Our products may infringe the intellectual property rights of others, which may cause us to incur
unexpected costs or prevent us from selling our products.
We cannot be certain that our products do not and will not infringe issued patents or other intellectual property rights of others. We may not
be aware of currently filed patent applications that relate to our products or technology. If patents are later issued on these applications, we may
be liable for infringement. We may be subject to legal proceedings and claims, including claims of alleged infringement of the patents,
trademarks and other intellectual property rights of third parties by us, or our customers, in connection with their use of our products.
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