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S&P: Seagate unchanged
Standard & Poor's said news that Seagate Technology's will acquire Samsung's hard disk drive assets in a $1.3 billion transaction comprised of 50% stock and 50% cash does not affect its BB+ corporate credit rating.
The outlook is stable.
The agency said that consolidation of the hard disk drive industry is likely to be a positive factor over time, with the potential for more stable pricing for all participants and less cyclicality in operating trends.
S&P said it believes that Seagate's strong liquidity and expected annual operating cash flow that exceeds $1 billion is more than sufficient to cover the newly announced dividend, the $560 million October 2011 maturity and the cash portion of the Samsung transaction.
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