A $13 Billion Christmas Present?

Big acquisitions so often come in bunches. Sure, the timing is almost never deliberate; it just always seems to work that way. So am I surprised that a day after Oracle (Nasdaq: ORCL  ) and PeopleSoft (Nasdaq: PSFT  ) agreed to merge in a $10.3 billion deal, rumors surfaced that antivirus software maker Symantec (Nasdaq: SYMC  ) would acquire storage software supplier Veritas (Nasdaq: VRTS  ) for $13 billion? Nope.

In breaking the story The New York Times reported that the two have been in talks for more than a month and are nearing a deal. The Times also goes on to say how the deal would continue Symantec's trend of growing through acquisition. But I think there's more to it than that. After all, consider what Veritas does: It is the leader -- by a more than 20-point margin according to researcher IDC -- in software used to back up critical corporate data. In other words: Veritas keeps data safe, and Symantec secures computers.

The very fact that this deal is even being considered makes me wonder whether we're on the verge of redefining security and creating new opportunities for investors as a result. I mean, really, when it comes to networks, can't Cisco (Nasdaq: CSCO  ) or Juniper Networks (Nasdaq: JNPR  ) be security providers? Couldn't they program their routers to kill viruses as they transmit data? And what about savvy shopperEMC (NYSE: EMC  ) ? The leader in the overall storage software category helps companies resurrect entire data infrastructures in the event of a disaster. Isn't that dealing in security?

That's not to say there aren't reasons to question a deal in which Symantec could issue $13 billion in stock to acquire what had been a struggling company. In fact, investors are doing just that this morning. Symantec's shares are down more than 11% as I write. Veritas investors, on the other hand, are treating the rumor as the $13 billion Christmas gift it could be, lifting the stock by more than 9% in morning trading.

Still, Fools should give Symantec credit for thinking big. After all, that's what Rule Breaker investing is all about. As for us Rule Breaker wannabes, the question that remains isn't really what happens to either company if the deal goes through but rather what happens to the industries each participates in. In thinking about how they may be reshaped, the alert investor may find more than one unexpected present for his portfolio.

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Fool contributor Tim Beyers uses a Mac and a box of Kleenex to avoid computer viruses. Don't ask. Tim has no ownership interest in any of the companies mentioned. To check out his portfolio and get a peek at his other habits check out his Fool profile, which is here.


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