NetApp has given up on its attempt to acquire Data Domain, with the company's chairman and CEO Dan Warmenhoven, saying the company "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.”
EMC responded in a press release, with CEO Joe Tucci saying “This is 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. I have tremendous respect for Data Domain’s people, technology and business, and anticipate great things ahead for our respective companies, our customers and partners.”
EMC won the race for Data Domain after increasing its bid for the company to $US2.1 billion, all of it in cash. Data Domain previously rejected EMC's bid but has apparently found the latest offer compelling.
NetApp does not walk away empty-handed: the company will receive a $US57 million payment from Data Domain for terminating the previous merger agreement between the companies.
Early opinion suggests that the news is not all bad for NetApp. Enterprise Strategy Group analyst Steve Duplessie wrote this Twitter post early today: "NetApp bails out of the DDUP battle. I couldn't agree more. They don't need it - to much risk for too little reward."
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EMC has won the financial tug of war to acquire Data Domain for $2.1bn after NetApp lost its nerve and walked away from the negotiating table.