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New Maxtor well positioned in burgeoning storage market

Announcement posted by Maxtor 04 Apr 2001

Maxtor Corporation today announced the completion of its merger with Quantum HDD. The transaction establishes Maxtor as the world's largest hard disk drive manufacturer (based on annual combined unit shipments) and a leader in the delivery of storage solutions and technology.

Combined revenues from Maxtor and Quantum HDD were approximately
US$6 billion in 2000.

The product range of the merged company includes hard disk drives (HDDs) for an array of applications including desktop PCs and advanced servers, to network attached storage (NAS) solutions and consumer electronics products. Additionally, Maxtor's financial strength, operational excellence, and intellectual property portfolio will let the company maintain its leadership position in HDDs, and enable Maxtor to expand rapidly into new and growing storage segments.

"This merger is a historic moment for Maxtor, and we're very excited about the opportunities it offers our customers, shareholders, and employees," said Mike Cannon, President and CEO. "We now have a very broad line of products, an even stronger customer base, and the financial resources to capitalise on the growth opportunities in storage."

"There is virtually no form of technology out there that won't be touched in one way or another by storage," continued Cannon. "With the completion of the merger Maxtor is the company best positioned to provide the products, service and support that will be required to be the leader in the storage industry."

According to industry analysts, the need for storage will grow aggressively among all market segments over the next few years.

"The storage industry is at an incredible intersection. One where technology advancement, the emergence of networked computing architecture, and the delivery of rich media are all converging," said Crawford Del Prete, Senior Vice President, Hardware Research, International Data Corporation. "Storage has something to offer all of these areas, making it an immense opportunity for years to come. Maxtor is strategically equipped to not only capture value in its traditional HDD business, but also from its NAS and consumer electronics storage initiatives, placing them in a very strong competitive market position."

The merger is expected to provide cost savings between US$120 million and US$200 million annualised within 18 to 24 months. These savings will allow Maxtor to lower the breakeven point of the combined company, which will create additional financial resources that can be used for investments in developing new technologies and products to address emerging markets for storage.

Maxtor also today announced the appointment of Paul Tufano (Maxtor) to the position of Senior Vice President of Finance and Chief Financial Officer, in additional to his position of Chief Operating Officer. Michael Brown, Quantum's Chairman and CEO, has also joined Maxtor's Board of Directors.

Under the terms of the transaction, Quantum HDD shareholders will receive 1.52 shares of Maxtor stock for each share of Quantum HDD that they own. The transaction is expected to be tax-free to Maxtor, Quantum, and their respective stockholders and will be accounted for under the purchase method of accounting.

The new Companys stock will be traded under the symbol MXTR on the NASDAQ Stock Exchange.

Maxtor will provide an outlook on the second quarter 2001 for the combined company when it announces its first quarter results at the end of April.

ENDS

BACKGROUND
Maxtor Corporation [NASDAQ:MXTR] is a leading supplier of information storage solutions. Its current hard disk drive products include award-winning DiamondMax and DiamondMax Plus line of products for mainstream and high-performance PC systems and consumer electronics applications and DiamondMax VL line for entry-level PCs. Maxtor also offers the new 1394 External Storage solution and the MaxAttach family of network-attached storage servers. Maxtor has built its leadership position by consistently leading the industry in bringing new products to market, while delivering the highest levels of quality and customer support. More information about Maxtor and Maxtor products can be found at http://www.maxtor.com.

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