Netapp nixes Data Domain bid

July 9, 2009:A bidding war for Data Domain has ended with EMC acquiring the company after Netapp announced it would not increase its offer.

NetApp walks away with a US$57 million break-up fee from Data Domain as a result of the breakdown of the agreement.

“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,” said Dan Warmenhoven, NetApp’s chairman and CEO.

“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.”

“NetApp has established leadership positions in virtualised infrastructure, storage efficiency, and unified storage, even in these difficult economic times, by helping customers meet their business objectives with less physical storage while reducing costs. That commitment will not change. We look forward to continuing to build on our foundation of innovation and customer service, and to continuing to execute our successful growth strategy.”

On July 6 EMC announced an offer of $US2.1 billion for all outstanding shares with the sweetener that it was promising to close the transaction within two weeks, almost a month faster than the previous NetApp proposal.

Joe Tucci, EMC Chairman, President and CEO, said “The combination of EMC and Data Domain is strategically beneficial to both organizations and, when consummated, will deliver substantial and superior benefits to Data Domain stockholders as well as our respective customers, employees and partners.”