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Data Domain's board unanimously recommended stockholders to tender their shares to EMC, stating that the offer is advisable, fair to and in the best interests of Data Domain and its stockholders. The EMC tender offer commenced on June 2, and is currently scheduled to expire on July 17. Data Domain has canceled its special meeting of stockholders scheduled for August 14, at which stockholders were to consider the NetApp merger.

EMC expects the acquisition to be neutral to its non-GAAP earnings per share in its fiscal year 2009 and accretive to its non-GAAP earnings per share in fiscal year 2010. It believes that the deal would help to accelerate its pace of expansion and leadership in the fast-growing disk-based backup and archive market.

Meanwhile, NetApp said it will not raise its bid to acquire Data Domain. As a result, it has terminated the definitive deal with Data Domain, thus ending the two-month bidding war with EMC. Under the deal, the company received $57 million as break-up fee from Data Domain.

In May, NetApp reached a definitive agreement to buy Data Domain for $25 per share in cash and stock, and sweetened its bid in early June to $30 per share in cash and stock to match a $30 per share all-cash hostile bid made by EMC.

Pushing ahead with the bidding war for Data Domain, EMC raised its offer to $33.50 per share in cash from $30 per share, resulting in a total enterprise value of about $2.1 billion, net of Data Domain's cash.

In its revised proposal, EMC emphasized to Data Domain's board that its all-cash offer is clearly superior to the $30 per share stock-and-cash proposal from NetApp. The company said it was prepared to close the deal within two weeks, which is almost a month faster than the NetApp proposal.

In addition, EMC said its definitive agreement removed all deal protection provisions, including any break-up fee obligation, which could further impede the maximization of stockholder value for Data Domain stockholders.

NetApp today withdrew from the deal, stating the bidding war would diminish the deal's strategic and financial benefits.

Dan Warmenhoven, NetApp's chairman and CEO, said, "NetApp applies a disciplined approach to acquisitions, one focused intently on creating long-term value for our stockholders. We therefore cannot justify engaging in an increasingly expensive and dilutive bidding war that would diminish the deal's strategic and financial benefits."

Instead, NetApp said it will focus on its existing growth opportunities. The company said, "We look forward to continuing to build on our foundation of innovation and customer service, and to continuing to execute our successful growth strategy."

Data Domain specializes in deduplication services - a technology that help avoid repeated storage of the same data. This technology can reduce demand for storage devices, which is convenient for firms trying to cut hardware costs, and save floor space and electricity use in computer rooms.

While EMC already has a few deduplication products, Data Domain's specialization in this technology is expected to boost EMC's portfolio significantly.

Data Domain closed Wednesday's regular trading session at $33.90, down 5 cents on a volume of 3.32 million shares. In the after-hours, the shares further lost 43 cents or 1.27%.

EMC ended Wednesday's regular trading session at $12.45, up 3 cents, on a volume of 21.26 million share. In the after-hours, the shares further gained 3 cents.

NetApp finished Wednesday's regular trading session at $18.39, up 30 cents or 1.66%, on a volume of 8.41 million shares. In the after-hours, the shares further gained 66 cents or 3.59%.

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