The transaction, valued at $1.9 billion, is expected to be completed in the second half of 2006.

Seagate and Maxtor, a supplier of information storage solutions, recently announced that they have entered into a definitive agreement under which Seagate will acquire Maxtor in an all stock transaction.

Under the terms of the agreement, which has been 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. When the transaction is completed Seagate shareholders will own approximately 84% and Maxtor shareholders will own approximately 16% of the combined company. The value of the transaction is approximately $1.9 billion.

Seagate's executive management team will continue to serve in their current roles. The combined company will retain the Seagate name and executive offices will be located in Scotts Valley, California. Dr. Park will become a Director of Seagate upon the closing of the transaction. The transaction is expected to be completed in the second half of calendar 2006, subject to obtaining shareholder approvals and customary regulatory approvals.

"Seagate is excited about the opportunity to achieve greater scale, reduce supply chain costs, and leverage combined R&D efforts across a broader product set. With the increased scale of the combined company, we can reduce overall product costs and provide more innovative products at more competitive prices," said Bill Watkins, Seagate CEO. "We believe this is a strategic combination that will provide value for our shareholders as well as benefits for our customers."

"We believe this combination offers an exciting opportunity for our two companies to come together in a transaction that maximizes value for our stockholders, through the combination of an attractive premium and through future value enhancement of the combined company's operations," said Dr. C.S. Park, Maxtor Chairman and CEO. "Together, we will leverage our combined technical resources to deliver to our customers an even more compelling and diverse set of products, and get them to market more quickly and cost effectively."