On April 23, 2024, Seagate Technology and its subsidiaries, Seagate Technology HDD (India) Private Limited and Seagate Singapore International Headquarters Pte. Ltd., entered into an Asset Purchase Agreement (APA) with Avago Technologies International Sales Pte. Limited, a subsidiary of Broadcom Inc. The APA involved the sale of certain assets related to the design, development, and manufacture of system-on-chip products for $600 million in cash.
As part of the agreement, Avago Technologies agreed to offer employment to some of the employees involved in the SoC Operations. In addition to this transaction, Seagate Technology LLC and Purchaser restructured an existing purchasing agreement in connection with this transaction. The agreement includes remedies for both parties in case of non-compliance with the terms, such as the possibility of terminating the relationship prior to its expiration. This move by Seagate Technology marks a significant strategic decision and highlights their partnership with Broadcom Inc.
This transaction also demonstrates how companies are constantly evolving their operations to stay competitive in the technology industry. The sale of assets related to system-on-chip products shows that companies are willing to divest themselves of non-core assets to focus on what they do best. Furthermore, it highlights how important it is for companies to have robust purchasing agreements that provide remedies in case of non-compliance.
Overall, this transaction by Seagate Technology and Broadcom Inc. marks a significant move in the technology industry and demonstrates how strategic decisions can shape a company’s future success.
