Seagate swallows Maxtor
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Posted in Financial News, 18th May 2006 23:23 GMT
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In brief The largest hard drive vendor has just got larger.
Seagate has completed its merger with smaller rival Maxtor, after shareholders agreement yesterday. The deal, announced last December, values Maxtor at around $2bn.
Maxtor lost $102m on revenue of $881m in the first three months of this year, which means revenues are 17 per cent down and losses have increase fivefold from a year ago. Seagate, by contrast, has enjoyed better fortune in recent years. Its latest earnings saw revenue of $2.29bn and net income of $274m.
Maxtor's focus on retail and branding has left it vulnerable, while Seagate's OEM strengths saw it well placed to ride the demand for notebook drives. Almost 18 months ago, Maxtor admitted it had abandoned its attempt to build out a line of 2.5 inch drives used in notebook PCs.
Thirteen and a half thousand Maxtor staff join the 43,000 employed by Seagate.
MXO stock will cease trading as of next week. ®
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