On 12th December 2011, MOFCOM publicly disclosed its decision to clear Samsung and Seagate hard disk deal by imposing several conditions. According to the Asset Purchase Agreement, Seagate Technology intends to acquire control of Samsung Electronics’ hard disk business by purchasing all relevant assets. The acquiring party, Seagate Technology, is a multinational enterprise, engaging in the manufacture and sales of hard disk and other digital storage products. The target assets are all plants, equipments and other assets specifically for R&D, manufacture and sales of Samsung Electronics’ hard disk.

From MOFCOM’s point of view, the market for manufacture and sales of hard disk constitutes a separate and distinct market by taking considerations on both demand and supply side. Moreover, the geographic scope of competition for hard disk is worldwide. Consequently, relevant market in this case is determined as worldwide market for manufacture and sales of hard disk.

MOFCOM examined a variety of facets in this transaction for the purpose of avoiding a restriction or elimination of workable competition on relevant market, including market situation, procurement structure, rate of capacity utilization, products innovation, buying power, potential influence on Chinese consumers and market entry.

Through thorough investigation, MOFCOM reached the conclusion that concerning transaction triggers potential competition concerns. For one thing, it reduces the number of players in the already highly concentrated market; hence increases market concentration in a further degree. As a result, it may eliminate or restrict competition on the market for manufacture or sales of hard disk. For another, the said transaction would increase the possibility of exclusion or restriction of competition on the market by collusion between competitors.

In light of above-mentioned competition concerns, MOFCOM and the concentration parties finally agreed several conditions to be imposed with the clearance of Samsung and Seagate hard disk drive deal, with the view to avoid potential detrimental effects on competition on the market for manufacture and sales of hard disk.