EMC on Monday started a bidding war for Data Domain, offering to pay $300 million more for the data-storage company than rival NetApp.
EMC offered to pay $30 a share in cash for Data Domain, making the deal worth $1.8 billion. NetApp last month agreed to buy the company for $1.5 billion in cash and stock.
EMC's proposal amounts to a 20% premium over NetApp's deal, according to EMC. The acquisition would strengthen EMC's position in the disk-based backup and archive market and would result in a business larger than $1 billion for EMC next year, the storage company said.
"Strategically, this combination will further enhance our ability to broaden EMC's best-in-class storage portfolio for the benefit of EMC and Data Domain customers and this, in turn, will accelerate EMC's top- and bottom-line growth rates," Joe Tucci, chairman, president and CEO of EMC, said in a statement.
In a letter to Frank Slootman, president and chief executive of Data Domain, Tucci said he would maintain the company's senior management team and would operate Data Domain as a product division of EMC.
Data Domain's board had approved the May 20 NetApp offer before EMC's bid. Data Domain has not issued a response to the latest development.
Data Domain, EMC, and NetApp offer disk-based backup systems, which augment tape backup used for long-term storage of data, often to comply with government regulations and legal requirements. Data Domain, however, also specializes in deduplication technology that reduces the storage of redundant data.
The battle for Data Domain reflects the ongoing consolidation among makers of data center technology. In addition, there's a growing trend in storage in which network-attached storage vendors are teaming up with deduplication companies in order to make a stronger offering.
In this case, NetApp and EMC would strengthen their deduplication capabilities by buying a competitor. But examples of partnerships include NAS suppliers like BlueArc, Isilon, and Hewlett-Packard partnering with Ocarina Networks and others.
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