EMC's Tucci Appeals Directly To Data Domain Workers In Takeover Fight
The letter was released less than a week after NetApp seemed to have ended a bidding war with EMC over Data Domain with a cash and stock offer of $1.9 billion.
NetApp's new bid to acquire Data Domain came two days after EMC's offer to acquire Data Domain for $30 per share in a deal worth about $1.8 billion.
That EMC offer was about 20 percent over the original $1.5 billion offered for Data Domain last month by NetApp.
EMC has yet to respond to NetApp's latest bid for Data Domain with an increase in its $1.8 billion bid. It is widely expected by the storage industry to eventually increase its bid.
EMC, however, is putting pressure on Data Domain's shareholders by pointing out that its offer is better than NetApp's offer because it is an all-cash offer, which makes it quicker to execute and offers them tax benefits.
Data Domain said last week that its Board of Directors has unanimously approved NetApp's revised offer, but in a separate statement said last week that it is requesting its shareholders to "defer making a determination whether to accept or reject EMC's offer until Data Domain has communicated to stockholders its position regarding the tender offer from EMC."
A full text of the letter can be accessed by clicking here.
In the letter, Joe Tucci, EMC's chairman, president and CEO, praised Data Domain employees, many of whom previously worked at EMC, for building what he termed a "terrific company" and contributing to the development of data deduplication technology.
"And we admire how uncompromising you are in caring for and serving your customers," Tucci wrote. "In many ways, you remind us of EMC."
Tucci wrote that EMC's $30 per share all-cash tender offer to acquire Data Domain is superior to NetApp's part-stock, part-cash offer.
However, he wrote, there is more to the success of a merger than the purchase price.
He cited the fact that EMC has acquired 11 companies in the Silicon Valley area in the past six years, and now has about 6,000 employees in the region.
"We are very mindful of culture-respecting and preserving the various cultures that made the companies we acquired successful in the first place," Tucci wrote. "In nearly every instance, after joining EMC, these businesses have grown faster, advanced the development of their technologies more rapidly, reached more customers and provided greater career opportunities for their people than they had been able to do on their own."
If successful in its acquisition, EMC plans to keep the people and products of Data Domain intact and operate it as a product division within EMC, and to continue to invest in Data Domain's product development with part of what Tucci termed "by far the largest storage-focused R&D budget in all of IT."
"We have ample cash and a very strong balance sheet to fund an exciting future," he wrote.
EMC has the global marketing, the partner ecosystem, and the market reach to help Data Domain grow, Tucci wrote. "And we stand ready to welcome the talented people of Data Domain to EMC with open arms," he wrote.