History (1998): Adaptec Finally Abandons Plans to Acquire Symbios

Adaptec and Hyundai, the parent company of Symbios, are each just as disappointed as the other.

They had agreed that Adaptec would acquire in a cash transaction valued at $77 5 million.

But it was the US Federal Trade Commission (FTC) that put a wrench in the works.

“The mutual termination was based upon parties’ conclusion that the FTC was unlikely to approve the transaction in the current form,” reported Adaptec in a press release.

The US regulatory administration feared that the combination of the 2 companies would form a near monopoly in the I/0 storage technology market, particularly for SCSI interfaces.

Adaptec expects to take a charge of approximately $20 million in its quarter ending June 30, 1998, in connection with the failed transaction.

Only 4 days after Adaptec’s decision to abandon its acquisition plan, LSI Logic agreed to buy Symbios from Hyundai Electronics America for $760 million, including assumption of debt, payable in cash.

This time, the chip maker is unlikely to be held up by the FTC, give that its storage activity is fairly marginal.

It’s a big deal for LSI, a specialist in system-on-a-chip technology with slightly more than $300 million in sales per quarter, to swallow a company tht weighs in at $620 million.

LSI was just one of the bidders for Symbios, along with Adaptec and Intel.

This article is an abstract of news published on issue 126 on July 1998 from the former paper version of Computer Data Storage Newsletter.