Seagate to buy Maxtor

muckshifter

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Seagate to buy Maxtor for $1.9 bln in stock

Wednesday December 21, 8:02 AM EST

NEW YORK (Reuters) - Seagate Technology (STX) on Wednesday said it would buy rival computer disk-drive maker Maxtor Corp. (MXO) for $1.9 billion in stock, aiming to cut combined costs and drive development of new products.

In the deal, expected to be completed in the second half of 2006, Maxtor shareholders will receive 0.37 shares of Seagate common stock for each Maxtor share they own.

At current prices, the transaction is worth about $7.25 a share for Maxtor investors, a premium of more than 60 percent to its closing price on Tuesday. Maxtor's stock has not traded in that range since June 2004.

Seagate shareholders will own about 84 percent and Maxtor shareholders about 16 percent of the new combined company.

The combination is expected to add 10 to 20 percent to Seagate's cash earnings per share after the first full year of joint operations, Seagate said in a release.

It also expects to hit $300 million of annual operating expense savings after the first full year of the combination.

Seagate said its executive management team will continue to serve in their current roles and the combined company will retain the Seagate name.

The deal comes as Maxtor, whose biggest customer is No. 1 personal computer maker Dell Inc. (DELL), has been restructuring and battling increasingly stiff competition.

Analysts have said Maxtor has been losing market share to competitors like Seagate and Western Digital Corp. (WDC) in consumer electronics, one of the fastest-growing businesses for computer storage companies.

"With the increased scale of the combined company, we can reduce overall product costs and provide more innovative products at more competitive prices," Bill Watkins, Seagate's chief executive, said in a statement.

Seagate also backed its earlier outlook for its second fiscal quarter of $2.2 billion in revenue and earnings per share in the range of 53 cents to 57 cents.

Seagate shares were not trading premarket, according to Inet. Maxtor shares rose $2.36 to $6.88.

http://67.19.9.2/?article=28482


Crap, less choice now. :rolleyes:
 
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I honestly don't like this news.

Maxtor were a very good drive manufacturer, although Seagate were last on my list after i had quite a few Seagate drives fail in my server's, so i always went for Hitachi since, and from then on it's been Samsung.

This is disappointing, i hope they take the quality from Maxtor and combine it with Seagate, otherwise it's just going to go downhill...
 

Ian

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I have many Maxtor drives, and I've found them to pretty reliable and good performance - but they have always been an excellent price. The number of big names in the hard drive industry seems to dwindle every few years, so I hope prices don't rise now that Maxtor are out the picture.
 
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ive only ever got one maxtor and theres a reason for that
that drive failed really badly, it was very loud never got a maxtor since

then i went to seagate
so impressed so far very silent (touch wood)
great performance im happy to hear that there will be no more maxtor!
 

Me__2001

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i've got 2 maxtors and they're both working fine, i dont know how loud they are because of my case fans being so loud
 
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I have had 2 Seagate drives which are very silent and reliable, however i think my 7200.7 is becoming slightly louder, and slower. However it has been on daily for nearly 4 years. And it is an hp pc, so it was handicapped to start with :p
 

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