Autor Tema: Bye-bye, Maxtor...  (Pročitano 1820 puta)

0 članova i 1 gost pregledaju ovu temu.

Van mreže BojanM

  • Global Moderator
  • Dominator
  • *****
  • Poruke: 836
  • In Vino Veritas, In Hepar Cirrhosis...
Bye-bye, Maxtor...
« poslato: 23.12.2005 07:34:08 »
Seagate to buy Maxtor for $US1.9b in stock

New York
December 22, 2005 - 9:24AM


Seagate Technology will buy rival Maxtor for $US1.9 billion ($A2.58 billion), in a deal aimed at cutting costs through a tighter production process in the notoriously competitive disk-drive market.

Seagate chief executive Bill Watkins said the company did the all-stock deal, priced at a 60 per cent premium to Maxtor's closing share price on Tuesday, in order to acquire Maxtor's customers, rather than any specific technology.

"This is not a deal where we're acquiring a certain product," he said in an interview. "We want to buy their customer base, their revenue stream and layer it over our manufacturing process."

The deal, would give Seagate, which makes disk drives for the Xbox 360 gaming console as well as for personal computers, more than 40 per cent of the disk drive market. It has about 30 per cent now.

Seagate would not buy into any hot new growth area with the transaction. Maxtor specialises in providing disk drives for workhorse desktop computers used by businesses.

Analysts have said Maxtor has been losing market share to competitors like Seagate and Western Digital in consumer electronics, one of the fastest-growing businesses for computer storage companies.

Mr Watkins called the deal "an obvious consolidation play," defending the premium paid for Maxtor as fair given the $US300 million of annual operating expense savings he expected would be found after the first full year after the combination.

At current prices, the transaction is worth about $US7.25 a share for Maxtor investors. Maxtor's stock has not traded in that range since June 2004.

Maxtor shares rose 52 per cent on the New York Stock Exchange, while Seagate's shares climbed about 2.6 per cent.

Analysts voiced some concerns that the deal may face some regulatory hurdles, which were keeping Maxtor's shares below the deal's premium.

"There's still some doubt on the Street," said American Technology Research analyst Shaw Wu, citing anti-trust worries. "The deal's never done until it's done."

Seagate's chief financial officer Charles Pope acknowledged on a conference call that the anti-trust review was a reason that the deal was not expected to be completed until the second half of 2006.

"I think that at first blush it will appear that there is a significant concentration of share," he said, adding that he did not expect the companies would need to sell any businesses to get the deal through, given the competitive nature of the industry.

"Even after this combination there will be significant competitors out there with very large resources - both financial and technical resources," he said.

Maxtor shareholders will receive 0.37 shares of Seagate common stock for each Maxtor share they own. Seagate shareholders will own about 84 per cent and Maxtor shareholders the remainder of the new combined company.

The combination is expected to add 10 to 20 per cent to Seagate's cash earnings per share after the first full year of joint operations, Seagate said in a release.

Seagate also backed its earlier outlook for its second fiscal quarter of $US2.2 billion in revenue and earnings per share in the range of 53 US cents to 57 US cents. It said its executive management team would continue to serve in their current roles and the combined company would retain the Seagate name.

The deal comes as Maxtor, whose biggest customer is No. 1 personal computer maker Dell Inc., has been restructuring and battling increasingly stiff competition.

(Reuters)
pozdrav,
  Bojan