NetApp said Wednesday that it wouldn't up its offer for Data Domain and a proposed merger agreement was terminated. EMC will now acquire Data Domain for US$33.50 a share in cash.
Earlier this week, EMC raised its bid to US$2.1 billion for Data Domain in an effort to either complete a takeover or at least force NetApp to increase its bid for the third time. However, NetApp was stretching itself thin relative to EMC, which analysts estimate could have continued to bid higher for Data Domain.
Instead, NetApp will get a US$57 million break-up fee from Data Domain. NetApp hinted that it wouldn't up its bid forever on Monday when it noted that it would keep a disciplined acquisition approach.
In a statement, NetApp CEO Dan Warmenhoven said:
"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."
Data Domain said in a statement:
"Data Domain's board of directors has unanimously determined that the definitive merger agreement with EMC and the terms of the EMC tender offer are advisable, fair to and in the best interests of Data Domain and its stockholders."
This article was first published as a blog post on ZDNet.com.
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