Seagate plans Maxtor move

Hard drive vendor Seagate is poised to acquire rival vendor Maxtor for US$1.9 billion in shares according to recent reports in the US press.

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By  Stuart Wilson Published  December 21, 2005

Hard drive vendor Seagate is poised to acquire rival vendor Maxtor for US$1.9 billion in shares according to recent reports in the US press. The move, which would most likely come under scrutiny from antitrust regulators, would mark another step forward in the consolidation of the hard drive sector. The deal is expected to be formally announced later today. The expected purchase price of US$1.9 billion — approximately US$7.25 a share — represents a 60% premium on NASDAQ-quoted Maxtor's closing price on Tuesday 20th December. If Seagate does confirm its intention to purchase Maxtor, it would create a global hard drive market dominated by three major players: Western Digital, Hitachi GST and the combined Seagate-Maxtor operation. There would also be implications for the distribution partners of both vendors as the combined entity pursues the economies of scale that it believes would result from joining forces.

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