FTC scrutinizes Adaptec deal

Adaptec and Symbios receive letters from the FTC asking for more information about Adaptec's proposed acquisition of Symbios.

Adaptec's proposed $775 million buyout of Symbios is drawing closer scrutiny from the Federal Trade Commission.

Adaptec spokesman Adam Trunkey confirmed today that both companies, which supply adapter cards for computers and workstations, have received letters from the FTC asking for more information about the proposed acquisition.

Trunkey said the FTC requests, issued last week, are broad in scope and seek information "related to business practices, product development, and research and development efforts." The federal government increasingly has been scrutinizing technology mergers.

All mergers in the United States valued above $15 million receive some examination by the federal government. The issuance of second requests for documents, which happens in only a relatively small number of cases, indicates that regulators may have particular concerns.

The companies announced the acquisition in mid February. Under the deal, Milpitas, California-based Adaptec would pay cash for all the outstanding stock of Symbios, which is a division of Hyundai Electronics America. The companies said they hoped to close the deal 90 days after it was announced, pending regulatory approval.

Both companies make tools that connect peripheral devices to computers or workstations. Adaptec, which focuses primarily on Intel-based machines that run on Microsoft operating systems, is a large supplier of SCSI or "scuzzy" adapter cards.

Symbios, by contrast, makes products for higher-end machines, such as Unix servers and RISC (reduced instruction set computer) workstations. The company had been slated for to go public before Hyundai put it up for sale.