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Data General soars on EMC acquisition

Shares of Data General Corp. (NYSE: DGN) soared 4 3/16 to 17 3/8, or 31 percent, Monday after EMC Corp. (NYSE: EMC), a leading data storage provider, said it will acquire the company in a stock swap valued at $1.1 billion.

EMC said the deal will add to earnings in fiscal 2000 and be "significantly accretive" in 2001. EMC fell 2 5/16 to 57 1/16.

Under the terms of the deal, EMC will issue 0.3262 of a share of EMC for each share of Data General. Based on Friday's closing price of EMC, the transaction values Data General at $19.58 a share. Data General closed at 13 3/16 Friday.

EMC, which reported strong second quarter earnings last month, said in a statement that the acquisition will enable it to tackle the midrange storage market, a $10 billion market in 1998. Both companies are based in Massachusetts.

Data General's business server unit will operate as a separate EMC unit. EMC also said it will put its distribution might behind Data General's products.

"This acquisition delivers on our long-stated objective of constantly expanding our market opportunities," said Michael C. Ruettgers, EMC CEO. "Data General's products have proven technology leadership in the midrange storage market, particularly in the Windows NT and UNIX environments, but have lacked the global distribution and support needed to achieve their full market potential."