The dramatic bidding war between EMC and NetApp over deduplication vendor Data Domain is over after NetApp ceded to EMC’s fresh offer of $2.1 billion.
In response to EMC upping the stakes, NetApp declined to revise its bid and ceded the contest, despite its bid having the support of Data Domain’s board. NetApp received a $57 million break-up fee from Data Domain following the termination of the merger discussions.
NetApp CEO Dan Warmenhoven said a protracted bidding war would not give long term value to stockholders. “We therefore cannot justify engaging in an increasingly expensive and dilutive bidding war that would diminish the deal’s strategic and financial benefits,” he said.
Meanwhile EMC CEO Joe Tucci said Data Domain represented “a compelling acquisition from both a strategic and financial standpoint. We look forward to bringing Data Domain together with EMC to form a powerful force in next-generation disk-based backup and archive.”
EMC entered the bidding war for Data Domain with bigger pockets than NetApp, and quickly raised the stakes beyond NetApp’s original $1.5 billion offer, already a 25% premium for the money-making de-duplication innovator. NetApp then matched EMC’s offer of $1.9 billion, and gained the support of Data Domain’s board who urged stockholders to support the NetApp bid.
Such an intense bidding war in a recessionary period further validates deduplication technology, which has historically had a difficult time convincing notoriously-cautious data managers that deleting data is worth the benefits of storage optimisation.
Nortel’s vulture issues
Meanwhile, Nokia Siemens Networks agreed to acquire Canadian telecommunications provider Nortel’s wireless technology arm for $650 million.
The move will put Nokia Siemens, a joint venture between the two European vendors, in the number two spot in the CDMA wireless technology market behind Alcatel-Lucent.
It also will bring with it Nortel’s so-called LTE (Long Term Evolution) assets, an emerging wireless networking standard capable of 150Mbps downloads that is being trialed in Oslo.
The acquisition of Nortel’s CDMA assets, historically the most lucrative part of its carrier network division, sheds further doubt on the company’s future. Instead it appears to be facing a ‘death by a thousand cuts’. Recent speculation in the Wall Street Journal suggests the company’s assets may fetch a meager $2 billion in the US bankruptcy courts, an ignoble end for the networking giant once priced at $250 billion.