European Regulators OK Seagate-Maxtor Deal

The transaction could close next month.

Author:: Bill Snyder
Publish date:: Apr 27, 2006 1:24 PM EDT

European regulators have approved

Seagate's

(STX) - Get Report

acquisition of rival hard-drive producer

Maxtor

(MXO)

, removing the last legal obstacle to the $1.9 billion deal.

The news gave a solid boost to both companies; in recent trading on Thursday shares of Seagate were up $1.03, or 4.1%, to $25.91 while shares of Maxtor were gaining 44 cents, or 4.5%, to $9.53.

"The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area or any significant part of it," the European Commission said in a press release.

U.S. officials have already OK'd the deal, which could close as early as May.

The acquisition will solidify Seagate's leading position in the market, giving it a share of roughly 40%, about 10% more than the company now commands. And by removing a major player, the deal is likely to ease pricing pressures that periodically decimate industry profits.