04:04 AM ET 01/28/98
Compaq buy may hurt Digital chip sale to Intel-WSJ
NEW YORK, Jan 28 (Reuters) - Compaq Computer Corp's
buyout of Digital Equipment Corp could imperil an
earlier deal between Digital and Intel Corp , the Wall
Street Journal said Wednesday in its electronic edition.
Late last year, Digital agreed to sell a chip-making plant
and production rights to its ultrafast Alpha processor to Intel
for a package valued at $1.5 billion, including $700 million in
cash. That deal is still under review by federal antitrust
enforcers.
Citing sources close to the situations, the newspaper said
Compaq has the resources to sustain Alpha, if it chooses to do
so -- meaning the chip no longer would need an Intel cash
infusion.
During negotiations on its buyout, Compaq signaled that if
the Intel deal is rejected by the FTC, it would take
responsibility for the Alpha manufacturing plant and either sell
it or close it down, the newspaper said.
Citing lawyers close to the talks with the FTC, the
newspaper said one option under review is a requirement that
Digital sell the plant and rights to the Alpha, to keep it out
of Intel's hands.
((--New York Newsdesk, 212-859-1610)) |
