NetApp quits bidding war in face of EMC opposition
- 09 July, 2009 08:06
EMC has apparently stared down NetApp and won the bidding war over de-duplication and backup vendor Data Domain. But NetApp will walk away from the failed negotiations with a cool $US57 million.
NetApp Wednesday announced it will not raise its $US1.9 billion offer to purchase Data Domain and has terminated the merger agreement, resulting in payment of a termination fee.
EMC and NetApp have been fighting over Data Domain for more than a month, with the price rising from $US1.5 billion to $US2.1 billion - the latter number offered by EMC this week.
Data Domain stockholders had been scheduled to vote on the merger agreement with NetApp on Aug. 14. Instead, it appears Data Domain and EMC will likely strike a merger agreement.
EMC's $US2.1 billion offer for Data Domain was all cash, compared to NetApp's cash-and-stock offer.
Data Domain previously rejected a $US1.8 billion offer from EMC, noting that it would have to pay NetApp the $US57 million termination fee if it did not go through with the acquisition.
EMC criticized the companies for requiring such a termination fee. But NetApp announced Wednesday that it did receive the $US57 million break-up fee from Data Domain.
Data Domain's de-duplication technology, which can dramatically reduce ever-growing storage requirements, is highly covered by both EMC and NetApp.
"While NetApp's acquisition of Data Domain would have produced benefits for customers and employees and complemented NetApp's existing growth trajectory, we remain highly confident in our already compelling strategic plan, market opportunities, and competitive strengths," NetApp CEO Dan Warmenhoven said in a press release. "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."