8-KLeadership ChangesAcquisitions & DispositionsMaterial Agreements+2

Seagate Technology Holdings plc 8-K Report, Material Agreement (May 25, 2006)

Filed May 25, 2006For Securities:STX

Summary

Seagate Technology Holdings plc (STX) has filed an 8-K report detailing the completion of its merger with Maxtor Corporation, which became effective on May 19, 2006. This transaction significantly expands Seagate's market presence and product portfolio. As part of the merger, Seagate issued approximately 98 million shares to former Maxtor stockholders, representing about a 17% stake in the combined entity. The estimated value of this consideration was approximately $2.5 billion based on Seagate's stock price at the time of closing. The filing also addresses the assumption and amendment of Maxtor's outstanding convertible senior notes. Seagate has fully guaranteed Maxtor's obligations under its 2.375% Convertible Senior Notes due August 15, 2012, and its 6.80% Convertible Senior Notes due April 30, 2010. These notes are now convertible into Seagate common shares under specified terms, with potential cash or stock settlements upon conversion. Additionally, the report notes the resignation of James Coulter from Seagate's board and the appointment of Dr. C.S. Park, former CEO of Maxtor, to the Seagate board.

Key Highlights

  • 1Completion of the merger between Seagate Technology and Maxtor Corporation on May 19, 2006, creating a larger entity in the hard drive market.
  • 2Seagate issued approximately 98 million shares to former Maxtor stockholders, constituting roughly a 17% ownership in the combined company.
  • 3The total value of the consideration paid to Maxtor stockholders was approximately $2.5 billion, based on Seagate's closing stock price on May 19, 2006.
  • 4Seagate has assumed and guaranteed Maxtor's outstanding convertible senior notes (2.375% due 2012 and 6.80% due 2010).
  • 5The 2.375% 2005 Notes are convertible into Seagate common shares at approximately $17.65 per share under certain conditions, with conversion ending July 1, 2006.
  • 6The 6.80% 2003 Notes are convertible into Seagate common shares at approximately $33.14 per share without specific conversion conditions.
  • 7James Coulter resigned from Seagate's Board of Directors, and Dr. C.S. Park (former Maxtor CEO) was appointed to the Seagate Board.

Frequently Asked Questions

This 8-K filing reports the completion of the merger between Seagate Technology and Maxtor Corporation, which officially closed on May 19, 2006. It also details the assumption of Maxtor's debt obligations and changes in Seagate's board of directors.

Seagate has fully guaranteed Maxtor's 2.375% Convertible Senior Notes due 2012 and 6.80% Convertible Senior Notes due 2010. These notes can be converted into Seagate common shares under specific terms, and Seagate is obligated to make payments of principal and interest.

Seagate issued approximately 98 million shares to Maxtor stockholders, representing about 17% of the combined company. This means existing Seagate shareholders' ownership percentage has been diluted by approximately 17% due to the issuance of new shares for the acquisition.

Yes, Dr. C.S. Park, who previously served as Chairman and Chief Executive Officer of Maxtor, was appointed to Seagate's board of directors effective May 19, 2006, as per the merger agreement. James Coulter resigned from the board at the same time.