Data General Corp - Acquisition by EMC Corp.
August 09 1999 - 10:18AM
UK Regulatory
RNS No 7279n
DATA GENERAL CORPORATION
9 August 1999
Mark Fredrickson, EMC
508-435-1000 Ext. 77137
fredrickson_mark@emc.com
Ray Thomas, Data General
508-898-6545
ray_thomas@dg.com
EMC TO ACQUIRE DATA GENERAL
Accretive Transaction Will Enable EMC to Penetrate New Storage Markets
HOPKINTON, Mass. - August 9.1999 - EMC Corporation (NYSE:EMC), the world's
leading provider of enterprise storage systems, software, and services, and Data
General Corporation (NYSE:DGN) today announced that they have entered into a
definitive agreement for the acquisition of Data General by EMC. Under the terms
of the agreement, EMC will issue 0.3262 of a share of EMC common stock for each
share of Data General common stock, subject to certain adjustments. Based upon
the August 6, 1999, closing price of EMC common stock, the transaction is valued
at approximately $19.58 per Data General share, for a total consideration of
approximately $1.1 billion. Completion of the transaction is subject to
approval of Data General stockholders and appropriate regulatory review, and is
expected to occur before the end of 1999. EMC expects the acquisition to be
accretive to its fiscal year 2000 earnings and significantly accretive to fiscal
year 2001 earnings.
This acquisition will enable EMC to address customer requirements in the rapidly
growing midrange storage market, an approximately $10 billion market in 1998.
Data General's CLARiiON storage products are recognized as among the most
advanced midrange storage systems in the world. When combined with EMC's
industry-leading software, distribution and services capabilities, these
products will emerge as the world's most advanced midrange storage solutions and
enable EMC to fully address all of its customers' online storage needs in both
new and existing markets.
Data General's AViiON server business will operate as a separate unit of EMC,
with continued focus on the NUMA (non-uniform memory access) architecture,
enterprise Windows NT, and the worldwide health care business. EMC also plans to
leverage Data General's core research and development expertise in Intel-based
processor systems and high-performance operating systems across EMC's existing
range of products. These technologies also will be highly valuable in developing
network-attached storage solutions for the future.
Michael C. Ruettgers, EMC President and CEO, said, "This acquisition delivers on
our long-stated objectives of constantly expanding our market opportunities and
strengthening our storage offerings. Data General's products have proven
technology leadership in the midrange storage market, particularly in the
Windows NT and UNIX environments, but have lacked the global distribution and
support needed to achieve their full market potential. We believe they will
provide an excellent complement to our high-end Symmetrix Enterprise Storage
family and will enable us to serve this growing market segment."
Ronald L. Skates, Data General President and CEO, said, "As a technology and
market leader with an unmatched track record of execution, EMC is the ideal
company to continue the hard work and innovation of Data General into the next
millennium. We look forward to the opportunity for our technologies and our
people to thrive as part of EMC."
EMC's Ruettgers continued, "This acquisition also represents the union of
Massachusetts' two largest technology companies, Data General with its origins
in the early years of the computer industry and EMC 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, gives us even greater
confidence in our ability to maximize synergies and achieve the most efficient
integration possible."
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.
Data General Corporation, based in Westborough, Massachusetts, is a major
supplier of storage and enterprise computing solutions for customers worldwide.
In addition to CLARiiON Fibre Channel storage systems, the company's products
include high-end NT and UNIX-based AViiON(R) servers, and related software and
services. The company reported fiscal 1998 revenues of $1.5 billion. Additional
information on the company, its products, and services is available on the
Internet at www.dg.com. More information on CLARiiON technology and products can
be accessed on the Internet at www.clariion.com.
EMC Corporation, based in Hopkinton, Massachusetts, is the world's technology
and market leader in the rapidly growing market for intelligent enterprise
storage systems, software, networks and services. The company's products store,
retrieve, manage, protect and share information from all major computing
environments, including UNIX, Windows NT and mainframe platforms. The company
has offices worldwide, trades on the New York Stock Exchange under the symbol
EMC, and is a component of the S&P 500 Index. For further information about EMC
and its storage solutions, EMC's corporate web site can be accessed at
http://www.emc.com.
This release contains "forward-looking statements" as defined under the Federal
Securities Laws. Actual results could differ materially from those projected in
the forward-looking statements as a result of certain risk factors, including
but not limited to: (i) the operational integration associated with
acquisitions; (ii) delays in the development, production or acceptance of either
company's products; (iii) the transition to new products; (iv) competitive
factors, including but not limited to pricing pressures, in the computer storage
market; (v) the relative and varying rates of product price and component cost
declines. (vi) other risks associated with acquisitions; and (vii) other
one-time events and other important factors disclosed previously and from time
to time in EMC's filings with the U.S. Securities and Exchange Commission.
END
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