EMC buys Iomega

After months of playing hard to get, Iomega has reached agreement with EMC. Storage media manufacturer Iomega will be taken over by EMC, which specialises in storage systems and Storage Area Networks. Iomega had already rejected one offer from EMC, preferring to do a deal with Great Wall Technology, involving Iomega taking over two ExcelStor companies from the Chinese manufacturer. The first conciliatory noises from Iomega were heard in mid March, when following an increase in the size of the takeover offer, it declared that it would be prepared to enter negotiations with EMC.

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EMC will now pay $3.85 per Iomega share, valuing the company at around $213m. The transaction with Great Wall Technology has been iced, at a cost to Iomega of $7.5, which it is to pay to Great Wall Technology as a charge for unilaterally terminating the agreement.

Once the takeover, for which EMC still needs to present a public offer to all shareholders, which will probably occur in the second quarter of 2008, is complete, Iomega is to form the core of a new EMC division for end consumers and small businesses. As well as Iomega, this division will also include EMC’s Retrospect and Lifeline software products.

(trk)