The world's biggest hard disk drive company is to be created, through the takeover of Quantum's HDD business by Maxtor.

Constructed as a merger, the all-share transaction will see Quantun's HDD stockholders receive 1.52 shares of Maxtor common stock for every one share they hold in Quantum. This values the deal at $2.3 billion.

The enlarged business, to be named Maxtor
Corporation, produces more than 50 million hard drives a year.

Key to the deal on Maxtor's part is the annualised cost savings of $120 million to $200 million it expects within two years following the completion of the transaction. It also gives the company the revenue stream and clout to tough it out with Seagate, the traditional market leader.

And key to the deal on Quantum's part must be a keenness to get out of the cut-throat desktop hdd drive business. The company is retaining its upscale tape drive business. ®