Premise: Seagate Technology has said it intends to buy rival company Maxtor for $1.9 billion. Both companies produce hard drives. The deal, priced at 60% of Maxtor's closing share price, is intended to acquire Maxtor's customers, not its technology. Seagate, which also makes drives for Microsoft's Xbox 360, will have over 40% of the hard drive market share. The Scotts Valley, California, based Seagate had 30% of the hard drive market. Provided the deal makes it past regulatory committees, Maxtor shareholders will receive .37 of a share of Seagate common stock for every 1 share of the Milpitas based company.
Hypothesis: Seagate Technology plans to buy Max Factor.