Billion dollar drive

Disk drive giant Seagate is to buy rival disk maker Maxtor in an all stock transaction worth around $1.9 billion.

Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, 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 combined company expects to achieve approximately $300 million of annual operating expense savings in connection after the first full year of integration.

The deal is expected to be completed in the second half of calendar 2006, subject to obtaining shareholder approvals and customary regulatory approvals.