Digital Realty and DuPont Fabros Technology (DFT) have gone head-to-head in the data center business for years. They have similar business models, and target many of the same geographic markets and customers. There’s long been speculation that the two companies might get together.
Thus, Friday’s announcement that Digital Realty would acquire DFT in an all-stock $7.6 billion merger makes sense.
But why now? And what now? Those were the questions being asked by securities analysts and industry watchers in the wake of Friday’s announcement.
The merger creates a cloud colossus with 26 million square feet of data center space, and provides the new Digital Realty with clear leadership in the two hottest markets: Northern Virginia and Chicago.
It also shifts the competitive balance in the rapidly-changing data center industry, particularly in the market for wholesale (“plug and play”) data center space.
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