Imation will pay $300m in a combination of common stock and cash with potential for payment of up to an additional $70m based on the future financial performance of the acquired business.
TDK will retain its research and development, manufacturing and OEM businesses.
The deal includes the recording media business and use of the TDK brand name for current and future recording media products including magnetic tape, optical media, Flash media and accessories.
Frank Russomanno, president and chief executive at Imation, said: "With this transaction Imation expands our portfolio of brands and builds on our four pillars of storage.
"Imation is bringing the well known TDK brand into our growing portfolio of strong consumer brands as well as adding the highly respected TDK brand recording media products to our commercial and consumer product portfolio."
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