Storage specialist Maxtor has announced the signing of a definitive agreement to purchase the hard disk division (HDD) of storage vendor Quantum.
Valued at more than $2.3bn, the deal will make the company one of the largest disk drive specialists in the world, with a shipping potential in excess of 50 million units per year.
The merged company, to be named Maxtor Corporation, will be led by Mike Cannon, the current chief executive at Maxtor.
"Once combined, the company will have the financial resources, product breadth and intellectual property to capitalise on the future explosive growth of storage at both the storage device and sub-system levels," said Cannon.
The combined manufacturing resources of both companies will reduce duplication expenses by between $120m and $200m within 18 to 24 months, added Cannon. The additional profit generated will allow the company to branch out and fund expanded research and development in areas such as Intel server drives, consumer electronics drives and server appliances, he claimed.
In addition, Maxtor's Network Systems Group, which produces the MaxAttach range of network attached storage products, will be part of the combined company.
However, Maxtor said it is anticipating restructuring charges and expenses for the new enterprise to total between $120m and $180m.
Quantum's digital linear tape and storage systems (DSS) group was not involved in the transaction. It will operate as a stand-alone company known as Quantum Corporation, and will be led by current chairman, Michael Brown.
Despite remaining independent, Quantum DSS will continue to outsource product manufacturing to Maxtor. "I expect Quantum's relationship with Maxtor as our strategic manufacturing partner to strengthen," said Brown.
Official completion of the takeover will take place early next year, subject to the approval of Maxtor and Quantum HDD stockholders.
Separately, Maxtor has unveiled the Maxtor External Storage product, an external hard drive for 1394-equipped PCs and Macs. The product can provide up to 80Gb of additional storage for desktops and laptops, or for video editing, digital music and games. It is hot-swappable and has data transfer rates of up to 400Mbps.
First published in Computer Reseller News
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