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Wed, Dec 15, 2004 - Page 12 News List

Symantec begins talks with Veritas

SECURITY SOFTWARE A deal between the two would create a firm able to address a wide range of threats to computer security and networks

NY TIMES NEWS SERVICE , NEW YORK

Symantec, the software company that produces the Norton line of computer security and maintenance products, is in talks to acquire Veritas Software, a maker of data backup and storage programs, for more than US$13 billion, executives close to the negotiations said on Monday.

The deal, which could be announced as early as this week, would create a huge competitor in the software industry that would be a one-stop shop for products to fight a wide range of threats to personal computers and corporate networks. If successfully completed, it would represent one of the largest software company mergers.

The negotiations, which have gone on for more than a month, are almost complete, the executives said. Still, they cautioned that several issues remained unresolved and that it was possible that the talks could collapse. The exact terms of the deal could not be determined.

Symantec, like its best-known competitors, McAfee and Trend Micro, is trying to become the de facto provider of software to protect networks and personal computers. This means that stopping viruses is not enough anymore: A company that wants to compete has to tackle a broader array of computing issues, including spam and newer, more intrusive threats like "spyware," which are programs that track Internet use.

Veritas Software, which was founded in 1989 and is based in Mountain View, California, is by far the leading seller of software for data backup, storage and archiving.

According to the market research firm IDC, the company has 40 percent of the market for backup and archiving software, compared with Computer Associates International's 19 percent and EMC's 12 percent. In the market for file system software, which stores and organizes data files, Veritas is the market leader by an even wider margin, with a 60 percent share. Last year, Veritas had revenue of US$1.75 billion.

Through a series of acquisitions in recent years, Veritas has transformed itself from a storage software company into a company that provides end-to-end services. It has a market capitalization of US$10.6 billion.

Symantec already has one of the best-known brands in the software business with Norton. But it has enlarged its arsenal of products in a buying spree since the second half of last year, acquiring Brightmail, ON Technology and SafeWeb -- companies that brought strengths in fighting spam and making large corporate networks operate smoothly. These acquisitions cost nearly a half-billion dollars. Symantec's US$48 million purchase of the security firm (AT)stake, announced in September, brought it expertise in security audits and risk management.

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