EMC
to Buy Data General
WALTHAM, Mass.,
August 9th, 1999 (Reuters)
High-end data
storage leader EMC Corp. (NYSE:EMC) on Monday moved to grab a chunk of the mid-range
storage business with a deal to buy Data General Corp. (NYSE:DGN) for $1.1 billion
in stock, the companies said. EMC, which holds a 35 percent share of the $12
billion high-end storage market, said it will lend its considerable distribution
and support muscle to leverage Data General's CLARiiON line of mid-range storage
systems.
What
this means:
-
EMC strengthens
its hold on the disk subsystem market in general
-
EMC gains
presence in the mid-range disk subsystem market (its present focus is the
high end)
-
EMC gains
an entre into Dell's volumes (DG/Clariion presently is Dell's primary disk
subsystem supplier)
-
EMC opens
the possibility of marketing its own database clusters, by combining DG's
Aviion servers with its own arrays. (EMC has reportedly told Aviion that
the group will be kept on for at least two years. It is unclear whether
this means "as is", or in "maintenance mode", i.e. layoffs, and selling
only existing product, no new development)
-
Data General,
although ending as a distinct corporate entity, will gain some stability
- although layoffs often follow buyouts like this.