X-bit labs

Seagate to Remain Maxtor's Brand-Names – Firm.

Category: Storage

by Anton Shilov

[ 05/23/2006 | 06:31 PM ]

When Quantum became a part of Maxtor, its chief executive said that the latter would become “a premier drive company in the world”, which has never happened, but what has happened is that the premier hard disk drive company in the world – Seagate Technology – retains the brand-named of the firm it has just devoured.

On Tuesday Seagate Technology announced that it ad completed acquisition of Maxtor Corp., one of the major rivals for the giant, which owns approximately one third of the hard disk drive market.

“This is an exciting time for Seagate and for our industry, the demand for storage is at record levels globally and is continuing to grow,” said Bill Watkins, Seagate president and chief executive.

Adding to Seagate’s own line of branded products, Seagate said it would “retain a full range of Maxtor branded retail solutions”. It is unclear, how will the company compete against Maxtor’s Atlas enterprise-class hard drives without aligning them into the same lineup, or, how it will do it. Moreover, it unclear, how will more desktop-class hard disk drives from Seagate and Maxtor are going to fight against each other in the retail.

“Maxtor is the leading brand name in the retail space and it will significantly strengthen Seagate’s overall position in this burgeoning market. The combination of the two brands and the associated product lines represents the widest, most differentiated storage offering available to consumers today,” according to a statement by Seagate.

Seagate estimates that approximately 50% of Maxtor’s worldwide employees will be offered positions with the combined company moving forward, with the vast majority of those located in Asia Pacific manufacturing operations.

Under the terms of the agreement, Maxtor shareholders will receive 0.37 shares of Seagate common stock for each Maxtor share they own. When the transaction is completed Seagate shareholders will own approximately 84% and Maxtor shareholders will own approximately 16% of the combined company. The value of the transaction is approximately $1.9 billion.