-=PCTechTalk=- Seagate to buy Maxtor
- From: ~OoO~ <sirtroth@xxxxxxxxx>
- To: pctechtalk@xxxxxxxxxxxxx
- Date: Thu, 22 Dec 2005 17:27:18 -0500
Seagate to buy Maxtor
By Tony Smith
<http://forms.theregister.co.uk/mail_author/?story_url=/2005/12/21/seagate_buys_maxtor/>
Published Wednesday 21st December 2005 11:56 GMT
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. ®
--
<Please delete this line and everything below.>
To unsub or change your email settings:
//www.freelists.org/webpage/pctechtalk
To access our Archives:
http://groups.yahoo.com/group/PCTechTalk/messages/
//www.freelists.org/archives/pctechtalk/
Other related posts:
- » -=PCTechTalk=- Seagate to buy Maxtor
