Symantec and Veritas merge in US$13.5 billion deal

Barely three days after Oracle-PeopleSoft's US$10.3 billion mega deal, Symantec and Veritas have confirmed today that the companies have entered into a definitive agreement to merge in an all-stock deal valued at US$13.5 billion. The aggregate revenue of the combined company is expected to be US$5 billion for fiscal year 2006.

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By  Maddy Reddy Published  December 16, 2004

Barely three days after Oracle and Peoplesoft's blockbuster merger for US$10.3 billion, Symantec and Veritas have confirmed today that the companies have entered into a definitive agreement to merge in an all-stock transaction deal valued at approximately US$13.5 billion. The US$1.75 billion storage software vendor Veritas and the US$1.8 billion IT security vendor Symantec believe enterprise customers will now have a more effective way to secure and manage their most valuable asset, their information across all platforms, from the desktop to the data center, from consumers and small businesses to large organisations and service providers. Under the agreement, which has been unanimously approved by both boards of directors, Symantec shareholders will own approximately 60% and Veritas shareholders approximately 40% of the combined company. The transaction is expected to be tax-free to shareholders of both companies for US federal income tax purposes. The combined company will operate under the Symantec name. John Thompson, chairman and CEO of Symantec, will continue as chairman and CEO of the combined company. Gary Bloom, chairman, president and CEO of Veritas will be vice-chairman and President of the combined company. The board directors of the combined company will include six members of Symantec’s current board and four from Veritas current board for a total of 10 members. “Customers are looking to reduce the complexity and cost of managing their IT infrastructure and drive efficiency with fewer suppliers,” says John Thompson, chairman and CEO, Symantec. “The new Symantec will help customers balance the need to both secure their information and make it available, thus ensuring its integrity. We believe that information integrity provides the most cost-effective, responsive way to keep businesses up, running and growing in the face of system failures, internet threats or natural disasters.” Based on IDC data, the total market opportunity for the combined company today is approximately US$35 billion and is expected to grow to US$56 billion by 2007. By merging with Veritas, Symantec hopes to expand its combined revenue base and create an entity with significantly greater financial scale and resources. The aggregate revenue of the combined company is expected to be approximately US$5 billion for fiscal year 2006, which begins in April 2005 and ends in March 2006. “Our customers have told us that one of their most critical needs is to enable 24x7 access to information. At the same time, they must maintain tight security, comply with all regulatory requirements and operate within their existing budget constraints,” says Gary Bloom, chairman, president and CEO of Veritas Software. Approximately 75% of the revenue of the combined company is expected to come from the enterprise business and 25% from the consumer business. In addition, the combined company will have approximately US$5 billion in cash. The transaction is expected to close in the second calendar quarter of 2005 and is subject to customary closing conditions, including approval by the shareholders of both companies and regulatory approvals.

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