Seagate Technology Australia Pty Ltd - proposed acquisition of Maxtor Disc Drives Pty Ltd

Seagate Technology proposes to acquire Maxtor Corporation and sought informal clearance from the ACCC in relation to the acquisition. Seagate and Maxtor both manufacture and market computer hard disc drives, and import and distribute these on the Australian market through wholly owned subsidiaries.

1) The market for hard disc drives for high-end enterprise applications (the range of high performance storage servers used by firms); and

2) The market for hard disc drives for low-end applications, such as desktop and laptop computers, and consumer electronics applications.

The proposed acquisition will strengthen concentration in what are already highly concentrated markets. However, the ACCC formed the view that barriers to entry are not insurmountable, customers have strong countervailing power, and there are a number of alternative suppliers to which customers could turn if prices were raised significantly. The ACCC also noted that the markets exhibit short product life cycles and rapid product innovation, which has the potential to erode market power over time.

After consideration of the information provided by market participants and other information before it, the ACCC formed the view that the proposed acquisition is unlikely to result in a substantial lessening of competition in either market and decided that it would not oppose the acquisition.