Seagate Buys Maxtor

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There is no such thing in the IT industry as a fish that is too big to catch. Lenovo shocked the world when it bought IBM’s personal computing division, HP stunned observers before that when it took over Compaq (and subsequently made a mess of it) and during my Uni days I remember being particularly shocked when nVidia purchased previous gaming graphics king 3dfx. So clearly, we shouldn’t be surprised by the news that Seagate has acquired major rival Maxtor, though I still kinda was…

The agreement will cost Seagate a whopping $1.9bn (giving the company an 84 per cent stake) and has been unanimously approved by the boards of directors on both companies. Wording on these mega deals is full of hideous corporate phrases like ‘premier’, ‘leverage’, ‘synergies’ and ‘attrition’, but in essence the world’s biggest storage provider just got one heck of a lot larger.

The new monolith claims the move will save $300m in annual operating expenses after the first year of integration, but it declined to go into what this could mean for their significantly duplicated workforce. On completion, however, Maxtor big cheese C.S. Park will become a director of Seagate, but it is not yet known whether the Maxtor brand will disappear altogether or be used as a title for a specific division.

What this will mean for the two company’s products is hard to predict right now, but Maxtor warranties will be honoured through Seagate once the i’s are dotted and the t’s crossed. In all, this rather reminds me of the scene in The Phantom Menace where the large fish was eaten by a larger fish, which was in turn eaten by an even larger fish, I just hope it will play out in a significantly more satisfying way for consumers than that wreck of a movie did…

Links:
Maxtor
Seagate

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