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Seagate to buy Maxtor in billion dollar swoop

Seagate to buy Maxtor in billion dollar swoop

The demand for hard drives is increasing. Two of the largest players join forces in a billion dollar move.

Bit-tech reader Alastor writes to tell us The Inquirer is reporting that Seagate will buy Maxtor in a move worth nearly $2 billion.

Seagate is the world's leading hard drive manufacturer, while Maxtor is the third largest, behind Western Digital. The demand for hard drives is ever increasing, with the likes of Xbox 360, and possibly PlayStation 3 using hard drives for storing downloadable content. They are also starting to appear in consumer electronics, like Personal Video Recording solutions.

The deal, which is understood to be worth $1.9 billion, is set to be completed in the second half of 2006. If the deal falls apart, Maxtor will walk away with a cool $300 million.

The combined company should save around $300 million in operating expenses after the first full year of integration and the two firms will continue as separate companies until the deal is closed.

What will happen to RMAs when the deal is closed? We would hope that the combined company will handle all RMAs. Have you recently bought a Maxtor hard drive? What do you think about this? We're seeking your thoughts in the forums.