Well, this is big news indeed.  CNN Money reports that Seagate will buy Maxtor for nearly $2 billion in stock.  Even with Dell as its top purchaser, it wasn't enough to stop the blood loss at Maxtor.  The deal is expected to be completed by the latter half of 2006.  Thanks to Marlin1975 from our forums for the tip:

The deal comes as Maxtor, whose biggest customer is No. 1 personal computer maker Dell Inc., has been restructuring and battling increasingly stiff competition.

Analysts have said Maxtor has been losing market share to competitors like Seagate and Western Digital Corp. in consumer electronics, one of the fastest-growing businesses for computer storage companies.