BREAKING NEWS: Symantec and Veritas to Merge

Symantec and Veritas to Merge

Symantec and Veritas to Merge

Symantec (SYMC:Nasdaq – news – research) Thursday said it will acquire rival software company Veritas Software (VRTS:Nasdaq – news – research)in an all-stock deal.

Based on Symantec’s closing stock price of $27.38 on Dec. 15, the transaction is valued at approximately $13.5 billion.

The two Silicon Valley-based companies have been discussing a deal for more than a month,

Under the agreement announced by the two companies, Veritas stock will be converted into Symantec stock at a fixed exchange ratio of 1.1242 shares of Symantec common stock for each outstanding share of Veritas common stock. The deal price represents about a 9.5% premium for Veritas shareholders.

Veritas shares added 89 cents, or 3.2%, to $29 in premarket trading. Symantec fell $1.32, or 4.8%, to $26.06.

The transaction is expected to close in the second quarter of 2005 will be accretive in the first combined year of operations.

On Monday, Oracle (ORCL:Nasdaq – news – research) announced a definitive agreement to acquire PeopleSoft (PSFT:Nasdaq – news – research) for $10.3 billion, ending the software industry’s most bitter takeover saga.

Also, as previously reported by

Symantec eyeing Veritas for $13bn

There could be another high profile software merger on the way with rumors circulating today that Symantec will buy Veritas Software for more than $13bn.

Such a deal would create the ultimate data protection vendor. Symantec specializes in anti-virus and network security applications, while Veritas is a major player in the data backup and storage software markets. The combined company would have strong consumer and corporate plays and be able to pull off true laptop to mainframe sales.

Veritas has been mentioned as a frequent acquisition target. Companies such as Sun Microsystems, EMC, Hitachi, IBM and Oracle have been named as possible suitors. Oracle is, of course, doing its best to drive consolidation in the software industry by picking up PeopleSoft and threatening to buy more firms.

Word of the possible merger – first reported by The New York Times – sent Veritas shares up close to 10 per cent, at the time of writing. The software maker started the day with a market cap of more than $10bn. Symantec investors have seen their shares drop more than 12 per cent, at the time of this report, to $28.80.

It would be somewhat surprising to see Veritas agree to an acquisition , given that the company’s CEO Gary Bloom has long said he thinks Veritas can grow at a steady pace on its own. Veritas has acquired numerous companies over the past two years, trying to build out its server software portfolio. Veritas pulled in $1.75bn in revenue last year.

Veritas, however, is attractive at the moment as its share price – $27.56 – is well below a 52-week high of $40.68. The company was hammered by investors after some accounting problems became public.

Symantec, by contrast, has seen its share price surge over the past year on the back of solid revenue growth. ®


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