Seagate to buy Maxtor for $1.9 billion

$1.9 billion in stock

NEW YORK, Dec 21 (Reuters) – Seagate Technology (STX.N: Quote, Profile, Research) on Wednesday said it would buy rival computer disk-drive maker Maxtor Corp. (MXO.N: Quote, Profile, Research) for $1.9 billion in stock.
Under terms of the deal, which is expected to be completed in the second half of 2006, Maxtor shareholders will receive 0.37 shares of Seagate common stock for each Maxtor share they own. Seagate shareholders will own about 84 percent and Maxtor shareholders will own about 16 percent of the new combined company.The combination is expected to add 10 to 20 percent to Seagate’s cash earnings per share after the first full year of joint operations, Seagate said in a release.

Seagate said its executive management team will continue to serve in their current roles and the combined company will retain the Seagate name.