Seagate to buy Maxtor for $2 billion

* SEAGATE and Maxtor confirmed the acquisition. The deal is worth $1.9 billion. The firms said the combination will be 10-20% accretive on a cash EPS basis after the first full year of combined operations. The combined company will save around $300 million in operating expenses after the first full year of integration, Seagate said. The transaction will be completed in the second half of next year. If the deal falls apart, Maxtor will pick up $300 million. The two firms will continue as separate companies until the close of the deal.

HARD DRIVE manufacturer Seagate will pay $1.9 billion to take over Maxtor, a report in the Wall Street Journal said.

According to the newspaper, the deal will be announced today, with both board of directors approving the acquisition.

Western Digital is the second hard drive manufacturer after Seagate, with Maxtor in third place. Demand for hard drives continues, driven by their use in all sorts of places rather than just computers. µ

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