Seagate to buy Maxtor

Seagate Technology, the digital storage giant, reached a deal today to acquire a rival, Maxtor, for $1.9 billion in stock.

Seagate's acquisition comes as the market for digital storage is booming. Corporations and individuals are saving vast numbers of files that are ever increasing in size, especially with the rising number of audio and video files.

Maxtor, the smaller of the two, has been struggling over the last few years, but it's fortunes have been gradually turning recently as it embarked on a turnaround. This deals seems to be all about scale.

The benefits to be derived from the deal are firming up Seagate's number 1 position in storage and wringing cost improvments from Maxtor in particular. A classic utility style deal. Oh well.