Seagate 2010 Annual Report Download - page 38

Table of Contents
• announcements of innovations, new products or significant price reductions by us or our competitors, including those competitors
who offer alternative storage technology solutions;
• our failure to meet the performance estimates of investment research analysts;
• the timing of announcements by us or our competitors of significant contracts or acquisitions;
•
general stock market conditions;
•
the occurrence of major catastrophic events;
• changes in financial estimates by investment research analysts;
• changes in the credit ratings of our indebtedness by rating agencies; and
•
the sale of our ordinary shares held by certain equity investors or members of management.
Risks Related to our Pending Strategic Alignment with Samsung
We will not be able to complete the Strategic Alignment with Samsung unless we receive the requisite regulatory approvals, or the regulatory
approvals may contain burdensome conditions.
We have recently announced the entry into an asset purchase agreement with Samsung Electronics Co., Ltd. ("Samsung"), pursuant to
which we agreed to acquire certain assets and assume certain liabilities of Samsung relating to the research and development, manufacture and
sale of hard disk drives and to enter into certain related agreements in connection therewith, including an intellectual property agreement, a
patent cross-license agreement, a disk drive supply agreement, a NAND flash memory supply agreement and a shareholder agreement. The
purchase price for these assets consists of $687.5 million in cash and approximately 45.2 million of our ordinary shares. Under the terms of the
asset purchase agreement, the transactions contemplated thereby are subject to the expiration or termination of the applicable waiting period
under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended, clearance by the European Commission and the receipt of certain
other similar regulatory approvals from the Republic of Korea, Japan, and the People's Republic of China. While we intend to consummate the
transactions contemplated by the asset purchase agreement and related agreements as soon as practicable after such regulatory approvals are
obtained, there can be no assurance that we will obtain such approvals when expected or at all, which could, among other things, delay or
prevent us from completing the transactions contemplated by the asset purchase agreement and related agreements or restrict our ability to
realize the expected financial and strategic goals of the transactions contemplated thereby. In certain specified circumstances, we must pay
Samsung a termination fee of $72.5 million (generally if the transaction has not been consummated and the requisite regulatory approvals have
not been obtained by the Expiration Date of December 31, 2011, which may be extended in certain circumstances to March 31, 2012). If
regulatory approvals have been obtained but the transaction has not been consummated by the Expiration Date, then in certain specified
circumstances we must pay Samsung a termination fee of $82.5 million (generally if we are in breach of the agreement and legal remedies are
not awarded to Samsung).
In addition, the governmental entities from which these approvals are required may impose conditions on the completion of the transaction
or require changes to the terms of the strategic alignment. While we do not currently expect that any such conditions or changes would be
imposed, there can be no assurance that there will not be, and such conditions or changes could have the effect of jeopardizing or delaying
completion of the transaction or reducing its anticipated benefits. If we agree to any material conditions in order to obtain any approvals required
to complete the strategic alignment, the business and results of operations of the combined company may be adversely affected.
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