Agree. Here are the announcements (Internal and External).
SENT 06-23-97 FROM PIEPER_ROEL @POST
From: Roel Pieper
To: All Employees
Re: Tandem and Compaq Join Forces
Today marks one of the most significant days in Tandem's history. This
morning Compaq and Tandem announced their intent to merge in a
ground-breaking relationship that will bring together two of the
computer industry's strongest and most successful companies to create
the leader in reliable standards-based enterprise computing. With
Tandem valued at approximately US$ 3 billion, the merger will set a new
benchmark for the industry - the standard by which all others will be
measured.
Compaq has justifiably achieved an outstanding position in the computer
industry. It holds the number one position both in PCs and also as a
provider of servers based on open standards. In addition it shares our
philosophy of commitment to quality and customer service.
Our NonStop. computing capabilities will be a tremendous complement to
Compaq's strengths in high volume NT servers. Equally, Compaq will
provide the breadth of product range, and delivery channels that
Tandem's customers require for their Enterprise needs. Our combined
companies will be able to bring new levels of price/performance to the
enterprise market, while continuing the work and partnerships that
Tandem has initiated in areas such as ServerNet and NonStop. Software.
We remain committed as ever to our Himalaya, UNIX. System and, of
course, NT strategies.
Let me also assure you that this combination is about growth and
opportunity for both companies. We are both actively recruiting and
developing people. This will not be a merger to reduce costs but rather
to grow and provide greater opportunity for both Tandem and Compaq
employees. Our combined work force will exceed 27,000 people with
combined revenues in excess of $20 billion in fiscal year 1996.
Our companies share many similar values and a strong drive to succeed.
Both companies began as small, entrepreneurial start-ups driven by an
intense commitment to customers and employees. Just as Tandem started
with a passion for customer-driven, product innovation in Cupertino,
Compaq began as an idea on a napkin at a Houston pie shop. Together,
we'll offer the broadest range of scalable computing solutions across
the entire spectrum of enterprise computing, from handhelds and
portables to networked desktops and workstations, all the way through
clustered NT servers and the NonStop. Himalaya. a range of massively
parallel systems.
Subject to certain approvals, Tandem will become a wholly owned and
separate operating subsidiary of Compaq and will continue to offer its
entire product line under its existing brand and company name.
Although we will have many details to work over the coming weeks, there
are several important pieces of information for all of us to understand
- The merger is still subject to approval by our shareholders,
government clearance, and certain closing conditions.
- The agreement will not "close" until later this year.
- Each share of Tandem stock will be exchanged for .21 shares of Compaq
stock. Employee stock options will be converted similarly. For an
example of how to compute your option conversion, please refer to the
Q&A's listed on the internal web site. Other benefit changes are also
explained on the web site.
We are committed to providing you as much information as we can. I
encourage each of you to go to www.roel.tandem.com to access additional
information, view the press release, and key questions and answers. Feel
free to submit any unanswered questions through the 'Feedback' section
of this page or by e-mail to corp_communications@tandem.com. Your
managers will also be providing you additional information over the
coming days.
This truly marks the beginning of a new era for us. We will combine the
talents and dedication of each of you with the abilities and commitment
of Compaq to become a larger force in the industry. I congratulate each
of you on this historic occasion and ask you to now join me in becoming
the newest additions to the Compaq family.
Roel
--------------------------------
PRESS RELEASE
Compaq To Acquire Tandem
Positions the Combined Company as the Leader in
Enterprise Computing Solutions.
NEW YORK, June 23, 1997 - Compaq Computer Corporation (NYSE: CPQ) and
Tandem Computers Incorporated (NYSE: TDM) today announced the completion
of a definitive merger agreement in a stock-for-stock transaction. In
the transaction, Compaq will issue approximately 29 million shares of
Compaq common stock, based on an exchange ratio of .21 shares of Compaq
common stock for each share of Tandem common stock. Based on the June
20, 1997 closing price of Compaq common stock as reported by the New
York Stock Exchange, the transaction is valued at approximately $3.0
billion. Under the terms of the agreement, Tandem will become a wholly
owned subsidiary of Compaq Computer Corporation.
"The combined companies will provide significant economic value growth
for our shareholders," said Earl Mason, Chief Financial Officer of
Compaq. "The tax-free combination will be immediately accretive,
meeting all of Compaq's economic tests." Because the transaction will
be a "pooling of interests," the Compaq board of directors has rescinded
its previously announced systematic share repurchase program to
accomplish the transaction.
As the number one server supplier in the world, the Compaq/Tandem
combination will have a strengthened focus on the customer and offer the
broadest range of reliable, scalable solutions across the entire
spectrum of business-critical enterprise computing. "Our total
addressable market has been doubled to approximately $650 billion .
This offers opportunity for significant revenue growth," said Eckhard
Pfeiffer, President and CEO, Compaq. "We will truly offer complete
solutions, from handhelds and portables, to networked desktops and
workstations, all the way to Windows NT servers and the Himalaya range
of massively parallel commercial systems," Pfeiffer said.
This acquisition underscores Compaq's commitment to the highest quality
standards-based enterprise computing and creates a world-class business
partner for customers. "As a result of the acquisition, Compaq's field
resources will more than double, each person focused on building
enduring customer relationships," Pfeiffer continued. "They will
perfectly complement the strong reseller channel and field support
professionals currently in place to serve Compaq customers. Compaq
resellers, moreover, will benefit from the increased growth in volume of
world-class products offered by the combined companies," Pfeiffer
concluded. These resources include individuals dedicated to pre-sales
and sales account management, professional and consulting services, and
global service and support.
Compaq and Tandem will have an unprecedented focus to ensure customer
success and address customer needs for powerful, reliable products,
while at the same time driving even greater price/performance and lower
total cost of ownership. "The phenomenal rate of change in the IT
industry demands a new business model, one that depends on strategic
partnering to stay competitive and to be a market maker," said Roel
Pieper, CEO of Tandem. "This merger is based on this concept and will
provide the added benefit of creating a broader range of open customer
solutions to the market."
"At Tandem we had been in the process of extending our enterprise lineup
to offer reliable and scalable Windows NT solutions to our customers.
This combination with Compaq will turbocharge this strategy. The NonStop
computing capabilities of Tandem's Himalaya systems will represent a
technology foundry to fuel growth and adoption of enterprise NT.
Furthermore, we will continue our drive to make ServerNet and NonStop
Software open standards in the industry," he said.
As the leaders in reliable standards-based enterprise computing, these
companies combined will expand their technology leadership to further
embrace server clustering, OLTP and electronic commerce, messaging
technology, security encryption, databases and SmartCards.
"The PC revolution was led by innovators like Compaq. If you want to
know where the future of enterprise computing is going, look to where
the leader of the PC revolution is taking it," declared Ben Rosen,
Chairman of the Board, Compaq.
"As a founding member of the Tandem company, I can envision no better
future for the shareholders, customers and employees of Tandem," said
Tom Perkins, Chairman of the Board, Tandem. "Tandem was formed in 1974
on a basic concept, the need for NonStop computing. This merger ensures
that the Tandem fundamentals will endure." To take advantage of his
industry expertise, Perkins has been invited to join the Compaq board of
directors.
In addition to his role as CEO of the Tandem subsidiary, Roel Pieper
will become a senior vice president of Compaq, reporting directly to
Eckhard Pfeiffer. Enrico Pesatori will continue as President and Chief
Operating Officer of Tandem.
Subject to approval of Tandem's shareholders as well as clearance under
the anti-trust laws and other customary closing conditions, the
transaction is expected to be consummated in the third quarter of 1997.
Company Backgrounds
Compaq Computer Corporation, a Fortune 100 company, is the fifth largest
computer company in the world and the largest global supplier of
personal computers, delivering useful innovation through products that
connect people with people and people with information. The company is
an industry leader in environmentally friendly programs and business
practices. Compaq is strategically organized to meet the current and
future needs of its customers, offering Internet and enterprise
computing solutions, networking products, commercial PC products and
consumer PCs. As the leader in distributed enterprise solutions, Compaq
has shipped over a million servers. In 1996, the company reported
worldwide sales of $18.1 billion. Compaq products are sold and supported
in more than 100 countries through a network of authorized Compaq
marketing partners. Customer support and information about Compaq and
its products can be found at compaq.com or by calling
1-800-OK-COMPAQ. Product information and reseller locations can be
obtained by calling 1-800-345-1518.
Founded in 1974, Tandem Computers Incorporated designs and delivers
technology solutions that companies rely on to compete in a business
world that runs 24 hours a day. A $1.9 billion company headquartered in
Cupertino, California, Tandem employs nearly 7,000 people worldwide, has
more than 180 offices and supports customers in more than 50 countries.
Information about Tandem can be found at tandem.com. To
request information via e-mail, send a message to info@tandem.com
This release contains forward-looking statements based on current
expectations that involve a number of risks and uncertainties. The
potential risks and uncertainties that could cause actual results to
differ materially included the operational integration associated with
mergers and acquisitions; market responses to pricing actions and
promotional programs; the implementation of operations and systems
improvements; timely development, production, and acceptance of the
products; continued competitive factors and pricing pressures; changes
in product mix; and inventory risks due to shifts in market demand.
Further information on the factors that could affect the company's
financial results are included in the company's SEC filings, including
the Form 10-K for the year ended December 31, 1996, and the Form 10-Q
for the quarter ended March 31, 1997.
# # #
Compaq, Tandem, Himalaya, NonStop, ServerNet are either registered
trademarks or trademarks. Product names mentioned herein may be
trademarks and/or registered trademarks of their respective companies. |
