UPDATE 2-EMC, Data Domain talked about combination
* EMC, Data Domain talked informally before NetApp deal
* Data Domain shares fall 1 percent in extended trade (Adds background on the talks)
By Anupreeta Das and Jim Finkle
NEW YORK/BOSTON, June 2 (Reuters) - EMC Corp (EMC.N) and Data Domain Inc DDUP.O held informal talks about a business combination several times before the smaller data storage company agreed to be bought by NetApp Inc (NTAP.O), two people familiar with the matter said on Tuesday.
The discussions concluded long before NetApp and Data Domain began the negotiations that led to their merger agreement, according to the sources who spoke anonymously because the talks were confidential.
They explored various ways that EMC, the world's top maker of data storage equipment, and Data Domain, which makes related products, could work together, said the sources.
The companies talked about partnerships, including reselling each other's products, and also about the possibility of EMC buying Data Domain, the sources said. But these talks never rose to the level of formal discussions, the sources said.
EMC has offered $30 a share in cash, or $1.8 billion, to buy Data Domain, topping a cash-and-stock offer for $1.5 billion by rival NetApp Inc that Data Domain has agreed to.
EMC made no secret of how much it covets Data Domain, which specializes in technology that allows customers to get rid of duplicate, or redundant, data, freeing up costly storage space in computers.
Data storage has become a hot area as growing use of the Internet forces companies to look for efficient ways to store information.
In a June 1 letter, EMC Chief Executive Joe Tucci complained to Data Domain CEO Frank Slootman that EMC was not given the chance to bid for the company before it agreed to be bought by NetApp, "particularly since I believe you should have been aware of our interest."
Tucci also said on a conference call that EMC "had its eye on" Data Domain for a while, but a rival got to it before them.
EMC had not consulted with Data Domain prior to making its acquisition offer because the merger agreement with NetApp prohibited Data Domain from holding talks with rivals, Tucci said.
EMC considers Data Domain's technology to be critical to its growth strategy, Bernstein analyst Toni Sacconaghi said in a research note.
Although EMC has some so-called data deduplication technology of its own, Data Domain's technology would speed up revenue growth, Sacconaghi said.
Data Domain shares, which closed Tuesday's session at $31.58, up 19.8 percent, fell 1 percent in extended trading.
Shares of EMC closed at $12.85, up 3.5 percent, on the New York Stock Exchange.
EMC and Data Domain declined comment. (Reporting by Anupreeta Das and Jim Finkle; Editing by Andre Grenon, Leslie Gevirtz and Bernard Orr)
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