BRUSSELS, Oct. 19 (Xinhua) -- The European Commission on Wednesday gave approval for acquisition of the hard disk drive (HDD) business of South Korea's Samsung Electronics by the U.S. Seagate Technology.
The decision was conducted under the European Union Merger Regulation and with in-depth investigation, the commission said in a statement.
The commission concluded that although the merger will further consolidate markets that are already highly concentrated, the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
The commission's examination showed that there are separate worldwide HDD markets based on their end use application (such as desktop computers, mobile computers, servers).
The commission also identified a separate market for external HDD in the EEA, which is downstream from hard disk drives.
The main impact of the transaction on the markets is for 3.5 inches desktop HDD and 2.5 inches mobile HDD, in which the investigation revealed that Samsung is not a particularly strong competitor.
There would remain three strong suppliers in the 3.5 inches desktop market (the merged entity, the U.S. Western Digital and Japan's Hitachi Global Storage Technologies), and four strong suppliers in the 2.5 inches mobile market (the three plus Japan's Toshiba).
With at least three suppliers, customers will retain sufficient options.
The commission also found that the removal of Samsung is not likely to affect the coordination among the remaining HDD suppliers.
The Seagate/Samsung deal was assessed independently of Western Digital's proposed acquisition of the HDD and Solid State Drives (SSDs) businesses of Hitachi which was notified one day later and is still pending.
