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EMC Acquires DG

EMC Corp. (www.emc.com) announced today that it has acquired Data General Corp. (DG, www.dg.com) for about $1.1 billion. Subject to approval by DG stockholders and regulatory review, the deal is expected to occur before year's end and EMC expects the acquisition to be accredited to its fiscal year 2000 earnings.

The transaction is intended to qualify as a pooling-of-interests for accounting purposes and as a tax-free exchange of shares under IRS regulations.

DG's Aviion server business will operate as a separate unit of EMC, and focus on the non-uniform memory access (NUMA) architecture and enterprise Windows NT. EMC also plans to leverage DG's core research and development expertise in Intel-based processor systems and high-performance operating systems across EMC's existing range of products, including network-attached storage.

EMC will also get Data General's Fibre Channel Clariion line of storage products.

Michael Ruettgers, EMC president and CEO, characterized the acquisition as the union of a company that's had its foothold in the industry since the early years and a company at the forefront of the current explosion in demand for intelligent storage. "The fact that we are neighbors, with headquarters just a few miles apart [EMC in Hopkinton, Mass. and DG in Southboro], gives us even greater confidence in our ability to maximize synergies and achieve the most efficient integration possible," Ruettgers explains.

Under the terms of the agreement, EMC will issue 0.3262 of a share of EMC stock for each share of Data General common stock, subject to certain adjustments. That adds up to about $19.58 per DG share for a total consideration of $1.1 billion. -- Brian Ploskina

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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