Seagate to buy Maxtor

[LiamC]

Deal announced today

http://www.theinquirer.net/?article=28482

 

[Tannin]

Huh? According to The Inq, "Western Digital is the second hard drive manufacturer after Seagate, with Maxtor in third place". Since when? Was I sleeping? I noticed when Seagate overtook Maxtor once again to reclaim its traditional place at the top of the table (and was completely unsurprised by that: mergers practically never succeed in retaining the market share of the two individual companies after the merger - look at Seagate and Conner as an example) but since when did lowly Western Digital slip into second place? WTF?

 

[CougTek]

Western Digital's sales increased significantly after StorageReview.com started to bless their Special Edition Caviar.

The news has been posted on the front page.

 

[Will Rickards]

And henceforth this shall be known as
Seaquaxtor

Well not really, they'll use the seagate name.

What is to stop them from buying Western Digital now?

 

[Mercutio]

The sale include a $399 million rebate, but Seagate has to include the original UPC and a completed rebate form.

 

[mubs]

I fail to see the business advantage behind this. Unless Seagate wanted Quaxtor's additional factory capacity cheaper and faster than they could build themselves.

 

[CougTek]

What is to stop them from buying Western Digital now?

From Nasdaq, at 14h33 earstern time :

MXO : 6.80$/share, quoted market value : 1.727B$

WDC : 17.86$/share, quoted market value : 3.852B$

What's stopping them? About 2.1 billion U$.

 

[P5-133XL]

What is to stop them from buying Western Digital now?

With a little luck the FTC - Excessive market share...

 

[P5-133XL]

I fail to see the business advantage behind this. Unless Seagate wanted Quaxtor's additional factory capacity cheaper and faster than they could build themselves.

It gets rid of a major competator (less competition means higher margins) - Increased market share - decreased manufacturing costs producing additional economies of scale. "Synergy". i.e the usual suspects.

 

[sechs]

http://www.eweek.com/article2/0,1895,1904184,00.asp

Sounds to me like they're buying market share and, therfore, greater economy of scale. Good for the ATA market, but I'm not sure how this will reflect in the SCSI market.