Report: Symantec Merger Costly

Proxy advisory service Glass, Lewis is urging shareholders to vote against the $14.8 billion merger of Symantec(SYMC Quote) and Veritas Software(VRTS Quote).

Although the merger, which will be the largest ever in the software industry, offers Veritas shareholders a premium of 50%, it's bad news for owners of Symantec, Glass, Lewis wrote in a report issued Thursday.

"In our opinion, the proposed transaction offers limited benefits to Symantec shareholders at great cost," the report said.

Since the all-stock transaction was valued late last year, shares of Symantec have dropped by 27%, amid worries that Veritas, a vendor of storage management software, will slow the fast-growing antivirus maker.

"History would indicate that such mergers [of dissimilar companies], especially in the technology world, often fall short of expectations," Glass, Lewis wrote.

The deal has cleared its major regulatory hurdles but still needs shareholder approval. Votes by shareholders of both companies are scheduled for June 24.