Storage provider Maxtor is to buy Quantum's hard-disk drive group for an estimated $2.3 billion in stock.

The new combined company is expected to ship more than 50 million hard drives annually for use in desktop computers, Intel-based servers and consumer electronic applications, the company said. The combined company is expected to offer a range of hard drives, SCSI drives, consumer electronic hard-disk drives and network-attached storage (NAS).

Maxtor said the company will maintain Quantum's current manufacturing relationship with Matsushita-Kotobuki Electronics Industries and also continue to use its current manufacturing capability, including its centre in Singapore.

The transaction, unanimously approved by the boards of directors of both companies, will create a business with annual revenues of $6 billion, Maxtor said. The deal is expected to reach completion by early 2001.