NetApp Folds, Opens Door For EMC To Buy Data Domain4:47 PM EST Wed. Jul. 08, 2009
NetApp has folded in its bidding war with EMC over Data Domain, and decided to not raise its offer.
NetApp made the announcement Wednesday, just two days after EMC said it is offering $33.50 per share, or a total of $2.1 billion in cash , for Data Domain. NetApp said it and Data Domain have terminated their merger agreement. As a result, Data Domain has paid a breakup fee previously agreed on of $57 million to NetApp, based on the two companies' original acquisition agreement.
NetApp on May 20 said it planned to acquire Data Domain for $1.5 billion in cash and stock. EMC on June 1 bid $30 per share in cash, totaling $1.8 billion, for Data Domain. NetApp followed on June 3 with a cash and stock bid of $1.9 billion.
Data Domain is the leading vendor of deduplication technology, also called "dedupe," which removes duplicate information as data is stored, backed up or archived. This results in a significant decrease in storage-capacity requirements.
Both EMC and NetApp already have their own storage dedupe technologies. In EMC's case, it has at least three types thanks to acquisitions and OEM deals.
While the acquisition would have brought benefits to NetApp's business growth and Data Domain's customers and employees, NetApp will focus on its existing strategic plans, market opportunities and competitive strengths, said Dan Warmenhoven, NetApp's chairman and CEO, in a statement.
"NetApp applies a disciplined approach to acquisitions, one focused intently on creating long-term value for our stockholders. We therefore cannot justify engaging in an increasingly expensive and dilutive bidding war that would diminish the deal's strategic and financial benefits ... We look forward to continuing to build on our foundation of innovation and customer service, and to continuing to execute our successful growth strategy," Warmenhoven said.