July 9, 2009 - EMC Corporation announced that it has entered into a definitive agreement with Data Domain, Inc. a provider of deduplication storage solutions, under which EMC will acquire Data Domain in a cash tender offer for $33.50 per share. The transaction is expected to have a total value of approximately $2.1 billion, net of Data Domains cash.
This announcement follows several weeks of a bidding war between EMC and NetApp. The companies were both interested in Data Domains technology, which helps organizations reduce storage costs by eliminating multiple storage instances of information. NetApp began the negotiations with Data Domain on May 20, 2009 with an original bid of $25 per share in cash and stock but has now terminated its merger agreement, citing that the company couldnt justify the increasing bid to shareholders.
NetApp applies a disciplined approach to acquisitions, one focused intently on creating long-term value for our stockholders, said Dan Warmenhoven, NetApps chairman and CEO in a press release. We therefore cannot justify engaging in an increasingly expensive and dilutive bidding war that would diminish the deals strategic and financial benefits.
Some industry analysts speculate that NetApp may itself be an acquisition target as the industry continues its consolidation. EMC expects that Data Domain will help accelerate EMCs pace of expansion and market position in the fast-growing next-generation disk-based backup and archive market. An acquision of NetApp would better position competitors to challenge EMC.
The acquisition is expected to be complete before the end of July.
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