Symantec Buys Veritas Software Corp. for $13.5 Billion

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Symantec, Corp., one of the biggest players in computer and Internet security, today said it had agreed to purchase Veritas Software Corp. for $13.5 billion in stock.

The Silicon Valley acquisition is the most recent in a string of takeovers and mergers in the computer software field. Earlier this week business software maker Oracle reached an agreement to purchase rival PeopleSoft for $10.3 billion after a nearly 18-month-long takeover battle.

Symantec, which is based in Cupertino, Calif. but maintains a large research and development presence in Los Angeles, said the acquisition will help it better offer products and services to handle data storage and growing concerns about security.

"The new Symantec will help customers balance the need to both secure their information and make it available, thus ensuring its integrity," said John W. Thompson, Symantec chairman, in a statement. "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."

Symantec makes, among other products, the Norton brand of security software that millions of computer users rely on to identify and ward off Internet viruses. Veritas' software is used primarily by corporations to manage and protect data stored on computer servers and other devices.

Under the deal, each share of Mountain View, Calif.-based Veritas will be exchanged for 1.1242 shares in Symantec stock. Based on Symantec's closing stock price of $27.38 on Wednesday, the transaction is valued at about $13.5 billion.

While company officials were enthusiastic about the acquisition, investors expressed their concern about the combination. Symantec shares fell more than 8% on the Nasdaq ; Veritas shares posted a more modest loss, dropping slight more than 1% in early afternoon trading on the Nasdaq.

The merged company, with about $5 billion in annual revenues, will operate under the Symantec name. Thompson, the Symantec chairman, will remain as chairman and chief executive officer of the company. Veritas president and chief executive officer will Gary L. Bloom will serve as vice-chairman and president of the combined company.

Symantec has posted dramatic increases in sales as consumers and corporations spend more on protecting their computers from Internet viruses and other security-related issues.

Symantec, one of the largest digital security companies, said that sales rose 44% during its fiscal second quarter while profits jumped to $136 million from $83 million in the same period last year.

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