EMC Corp. has won the battle for Data Domain Inc.
NetApp today said it will not increase its bid to acquire the data deduplication backup specialist, and Data Domain's board accepted the $2.1 billion
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Data Domain said its board recommends stockholders sell their shares to EMC, and cancelled its Aug. 14 meeting to vote on the last NetApp offer.
Industry insiders thought NetApp would be hard pressed to match EMC's latest salvo in the bidding war over Data Domain. Data Domain originally accepted a NetApp offer of $25 per share in cash and stock for a total of $1.5 billion on May 20. EMC then made an unsolicited all cash offer of $30 per share or $1.8 billion June 1 but NetApp made a counter offer of $1.9 billion that Data Domain accepted a day later. That's where things stood until EMC's counter on Monday.
"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 today 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."
Enterprise Strategy Group analyst Brian Babineau said it wasn't surprising that NetApp threw in the towel following EMC's $2.1 billion offer.
"NetApp could have gone higher, but at what expense? Severe shareholder dilution, diminishing cash balances so they couldn't make any other investments?" he said.
EMC released a statement that said it expects the deal to close by the end of the month.