DiData in $3.6bn NTT takeover deal

Japanese telco NTT (Nippon Telegraph and Telephone corporation) has made a bid for Dimension Data (DiData), worth £2.1 billion (AU$3.6 billion).

NTT and DiData have come to
a unanimous agreement. (Markets – Japan Stocks image by
Artemuestra, CC BY-SA 2.0)

The deal was unanimously recommended by both companies' board of directors and both have issued statements of resounding support for the deal.

Jeremy Ord, Dimension Data executive chairman, said in a statement that the combination of the two will lead to "a strong competitive position serving global corporations moving to managed infrastructure services and cloud computing".

Dimension Data shares have jumped over 20 per cent on the London Stock Exchange as a result of the announcement.

EMC chief technology officer, Chuck Hollis, said in a blog post that he'd "worked with both NTT and DiData on and off for many years", and placed cloud as the main driver for the buy.

"NTT is a very progressive telco-style service provider. They know how to stand up services in large datacentres, for example ...[and] Dimension Data is more than just a reseller, they're really a full-spectrum system integrator with a strong infrastructure focus," said Hollis.

Hollis said that there has been money to be made from what DiData does (providing value-added services and expertise for IT infrastructure) and money to be made from what NTT does (by providing high-quality services over the network). However, he added that the combination would be the killer.

"My bet is that — going forward — there's going to be an even bigger pile of money to be made by combining both models," he said.

Hollis predicted that more and more companies will merge in the future in order to combine IT infrastructure offerings.

"One way of interpreting the NTT-DiData combination is clear: this is emblematic of the new face of how IT services will get to market going forward."

NTT expects to complete the acquisition of Dimension Data by the end of October 2010.