Seagate to Acquire Maxtor
Seagate to Acquire Maxtor
December 22, 2005: Getting into 2005 by the skin of their teeth, Seagate and Maxtor have struck an agreement to merge in a US$1.9 billion all-stock mega deal. The combined company will retain Seagate’s name.
Due to the size of the merger, the deal is up for antitrust review. Finalisation of the agreement is expected to be delayed until late 2006. As there are a number of other players in the market, namely Hitachi, Samsung, Toshiba, Fujitsu and Western Digital, it is unlikely that there will be any antitrust complications.
According to Gartner/Dataquest, the combined company will control 43.1 percent of the storage market and also take the lion’s share of the of the enterprise market with 66.2 percent (through first three quarters of 2005).
The deal is based on finance and not technology. As Seagate is a leader technologically, it is looking to score extra revenue and beef up its manufacturing capabilities.
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