Product details

Seagate Technology planned to maintain and possibly expand its leadership in the disk drive segment by the acquisition of Maxtor Corporation in 2005. The identity of the disk drive business was centred on a squeeze between thin margins and a voracious appetite for research and development (R&D) dollars. Seagate's additional purchasing potential from Maxtor's customers would bring in a larger revenue flow to support its vision of R&D. The deal worth $1.9 billion would probably give Seagate a steady revenue stream from enterprise products and more strength to battle in other emerging and promising storage market segments. Maxtor on the other hand had been going through a financial crisis since 2004. Seagate seized the opportunity and took over Maxtor. The acquisition which was to be completed in 6 months by May 2006, intended to strategically place Seagate to take advantage of Maxtor's presence in segments where it performed better. Will Seagate's acquisition of Maxtor pay off? Will it be able to strengthen its storage leadership with this acquisition? Was it inescapable that Seagate had no other choice than to expand, and that acquiring Maxtor, probably its most closely matched contender, was a matter of competitive necessity? Could this 'necessity' translate into an advantage for Seagate?