HOPKINTON, MASS. - EMC today swallowed ailing Data General in a move that will net the high-end storage vendor an entry into the midrange storage market.
EMC announced that it would acquire DG for approximately $1.1 billion or $19.58 per share. The acquisition will also let EMC enter the server market and take advantage of DG's investment in Intel processors. DG's AViiON servers use nonuniform memory access technology and run Unix and Windows NT.
Until early this summer, EMC was storage partner of Hewlett Packard, who ditched them to enter an OEM agreement with Hitachi Data Systems for the enterprise storage market. Analysts predicted that the loss of this business would be harmful to EMC.
EMC also supplies storage to Sequent, recently merged with IBM. In July, IBM introduced high-end storage of its own, in an apparent last ditch effort to compete with EMC.
In 1998, Data General lost $154.4 million and earlier this year announced that it would invest $100 million in hiring a direct sales force to strengthen its offering in midrange storage. Currently, Dell is DG's OEM for storage.
Data General's AViiON server business will operate as a separate unit of EMC.
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