In our interview with Barry Edmonds, Imation's UK MD, he said that the media supply market was ripe for consolidation and Imation wanted to be a consolidator, not a consolidatee. Right. No really. Right now!

Imation has just announced it's buying TDK's media supply operation. Here's press release text:- "Imation will acquire (the) TDK brand world-wide recording media business and use of the TDK brand name for recording media products, for $300 million" ($20 million cash, $280 million common stock). There'll be a further payment if the acquired division does well. Both boards have agreed the deal.

TDK will retain its R&D, manufacturing and OEM business. Imation gets current and future TDK recording media products including magnetic tape, optical media, flash media and accessories. That adds to three of the four pillars of Imation's business.

TDK will continue R&D and manufacturing operations for recording media products including audio, video and data storage tape, and Blu-ray optical discs. TDK will supply Imation as well as its other OEM customers. The TDK board was convinced that Imation had better prospects of delivering value from the TDK brand than it could do on its own. Imation really does believe in the power of branding and the TDK media brand is a solid one to have.

TDK becomes the largest shareholder in Imation too. The stage is set for strategic collaboration between the two companies. The use of Imation stock for the majority of the purchase price also suggests a long-term relationship is what both parties have in mind.