Back in May of 2006 Seagate completed the purchase of Maxtor for $1.9bn in an all-stock transaction. Now Seagate has written off the entire acquisition value, plus a few hundred million dollars.
Seagate's Q2 09 accounts included an estimated $2.3 - $2.6bn worth of assets that were subject to impairment charges. While the charge has actually turned out to be only $2.2bn, it's still a pretty big goodwill write-off the company. Total impairment charge for the quarter was $2.3bn.
What is goodwill? Well, it's odd stuff. It represents the value of a company to make extra profit above and beyond the bottom-line value of the tangible assets.
What this means in the Maxtor case is that beyond tangible assets, Maxtor ability to make a profit has vanished and is itself worthless.