Seagate Technology to acquire Maxtor Corporation

Our Infotech Bureau
21 December 2005

Mumbai: Seagate (NYSE: STX) and Maxtor (NYSE: MXO) today jointly announced having entered into a definitive agreement under which Seagate will acquire Maxtor in an all stock transaction. The value of the transaction is approximately $1.9 billion.

Under the terms of the agreement, approved by the boards of directors of both companies, Maxtor shareholders will receive .37 shares of Seagate common stock for each Maxtor share they own.

The combined company will retain the Seagate name and executive offices will be located in Scotts Valley, California. Seagate''s chairman, CEO, executive vice presidents, and the principal equity investors have committed to vote their shares in favour of the acquisition.

"This transaction has significant strategic and financial benefits, and the combined company will be better positioned to anticipate and serve the needs of the global customer base in the highly competitive data storage market," Steve Luczo, Seagate chairman, said.

The transaction is expected to be completed in the second half of calendar 2006, subject to obtaining shareholder approvals and customary regulatory approvals. There is a termination fee of $300 million payable to Maxtor under certain conditions. The transaction is intended to be tax-free to Maxtor shareholders.

When the transaction is completed Seagate shareholders will own approximately 84 per cent of the combined company with Maxtor shareholders owning the remaining approximately 16 per cent.