Symantec is negotiating to buy storage software supplier Veritas for more than $13bn (£6.72bn), according to a report published Tuesday by The New York Times.
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The companies could announce a deal this week, according to the report, although some issues have yet to be resolved after more than a month of talks, and the deal could still fall through, the report said.
A Symantec spokeswoman declined to comment but said that if a deal was reached, it would be announced before the end of next week.
Veritas sells backup, archiving and file system software. The company has around 6,700 staff in 40 countries and reported revenue of $1.75bn for the year to December 2003.
Symantec sells software to protect computer systems and networks, including firewalls and tools to detect viruses and network intrusions. It has 6,000 staff and reported revenue of $1.87bn in its last fiscal year to March 2004.
Acquiring Veritas would allow Symantec to extend protection of corporate information systems to the data they contain. So far this year, Symantec has taken over anti-spam software company Brightmail and security consultant @Stake, and last week it announced plans to acquire intrusion system Platform Logic.
Sales of Symantec's products for home users grew 63% between the quarter ending September 2003 and the end of September 2004. Those sales now make up 51% of Symantec's revenue, compared with 45% a year ago.
At the same time, sales of security products to companies grew by 27% over that period, and now account for just 36% of the company's revenue, compared to 41% in September of last year.
Symantec planners have also been edging into the storage market, with acquisitions like the December 2003 purchase of PowerQuest, which made storage management software and services.
Carl Greiner, senior vice-president of technology research services at Meta Group, said security is becoming more of a factor in sales of storage technology, as companies look for ways to manage and control access to stored data and to comply with a host of data privacy regulations.
"Security is more than just backup and recovery. You have to manage the data effectively, and security is just one component of classification," he said.
Veritas and Symantec have both grown quickly through acquisitions in recent years, and knitting together disparate technologies and corporate cultures from those acquisitions could be a major challenge for the merged company, Greiner added.
"It will mean that you have to wade through more integration, and you could have a potential negative when it comes to getting product out," he said.
Peter Sayer and Paul Roberts write for IDG News Service