Seagate to buy Maxtor for $1.9 billion

(from The Inquirer)

Hard drive manufacturers Seagate and Maxtor confirmed the acquisition. The deal is worth $1.9PHP 112INR 161EUR 2CNY 14 billion. The firms said the combination will be 10-20% accretive on a cash EPS basis after the first full year of combined operations. The combined company will save around $300PHP 17,606INR 25,425EUR 286CNY 2,183 million in operating expenses after the first full year of integration, Seagate said. The transaction will be completed in the second half of next year. If the deal falls apart, Maxtor will pick up $300PHP 17,606INR 25,425EUR 286CNY 2,183 million.

Is this good news?

Maybe yes. Because the combined Seagate+Maxtor production line will save (as they claim) $300PHP 17,606INR 25,425EUR 286CNY 2,183 million on their first year and this could translate to bigger budget for R&D, huge HDD capacities and lower retail prices.

Maybe not. You now have a HDD giant having almost complete monopoly of the industry. And we know what it means for prices and reliability when one is the only single player left.