Feeds

Seagate to buy Maxtor

Rival acquired for $1.9bn

Eight steps to building an HP BladeSystem

Seagate its to acquire rival hard disk drive maker Maxtor the two companies announced today, in a stock-swap valued at $1.9bn.

If shareholders and regulators back the deal, Seagate will offer 0.37 of its own shares for every Maxtor share issued, splitting the merged business 84:16 between Seagate and Maxtor shareholders.

The deal is a classic attempt to cut costs and achieve better economies of scale by bringing two companies together - 'Maxgate' expects to achieve approximately $300m of annual operating expense savings "after the first full year of integration". It also eliminates a competitor.

The last couple of years have proved hard for hard disk makers, thanks to aggressive competition, falling margins and plunging prices. In October, Maxtor fell back into the red after a brief stint in profitability. It lost $7.1m on sales of $926m.

Seagate, the most successful of HDD companies of late, announced net income of $272m on sales of $2.09bn in what was effectively the same three-month period.

Once the acquisition has been completed - sometime in H2 2006 - the merged company will trade as Seagate and continue to be run by Seagate executives. Maxtor CEO and chairman, C S Park, gets a directorship in the merged operation. Until then, the two companies will operate as separate businesses.

Seagate said it is sticking by its previous forecast of Q2 FY2006 - due to end 31 December 2005 - sales of $2.2bn with earnings within the 53-57 cents a share range. ®

Mobile application security vulnerability report

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.