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Technology Stocks : Solectron -- Ignore unavailable to you. Want to Upgrade?

To: Charles Skeen who wrote (227)	12/20/1997 5:42:00 PM
From: kolo55	Respond to of 493

Solectron announces $100M deal with NCR. Friday December 19, 7:30 am Eastern Time Company Press Release SOURCE: Solectron Corporation NCR and Solectron Announce Plan to Outsource Manufacturing of NCR's Computer and Retail Products DAYTON, Ohio and MILPITAS, Calif., Dec. 19 /PRNewswire/ -- NCR Corporation (NYSE: NCR - news) of Dayton, Ohio and Solectron Corporation (NYSE: SLR - news) of Milpitas, California jointly announced today a plan for Solectron to acquire NCR's manufacturing assets in three cities for an estimated $100 million. The plan provides for NCR to outsource the manufacturing of its computer and retail products to Solectron for at least five years. As part of the plan, approximately 1,200 NCR manufacturing and related support employees would be hired by Solectron. Solectron would assume NCR's manufacturing capacity totaling 350,000 square feet and assets in Columbia, South Carolina; Atlanta, Georgia; and Dublin, Ireland. The facilities are used in the manufacture of NCR's computer servers, retail scanners, and point-of-sale terminals. NCR will continue to design and engineer computer servers used for data warehousing as well as retail products. At the close of the transaction, expected in early spring of 1998, Solectron would assume full manufacturing responsibility for all retail and computer products produced by NCR. The two companies have signed a letter of intent that also provides for the proceeds to be based on the value of assets transferred at closing. NCR believes this action will speed its transformation into a business solutions provider focused on bundling software and professional services combined with computer hardware and other products. NCR does not expect a one-time impact to its results from the assets being transferred and people moving to Solectron. ''We're pleased to have a world-class company like Solectron manufacturing our computer and retail products,'' said NCR Chairman and CEO Lars Nyberg. ''Together with Solectron, we believe we're better positioned to fight long-term price erosion, improving our product gross margins, while continuing to provide the highest quality products in our solutions.'' ''The deal also confirms NCR's strategic direction,'' Nyberg said. ''Now, both companies can do what they do best: Solectron will manufacture our computer and retail products while we concentrate on delivering solutions, software and services that add the most value for our customers.'' ''This announcement is part of Solectron's core strategy to continue expanding our business model and take on a larger share of the 'systems build' business,'' said Dr. Ko Nishimura, Solectron's chairman, president and CEO. ''We are seeing that more of our existing customers like NCR turn to us to become their virtual manufacturing partner. As we take on more of the 'systems build' business, you will see us continue to make investments in our infrastructure designed to sustain and propel this growth,'' Dr. Nishimura said. ''Even with the addition of more 'systems build' business, Solectron will continue to maintain a balanced customer portfolio with multiple, high-growth target segments,'' he added. The announcement does not impact NCR's manufacturing operations for the financial industry in Scotland, China, Brazil and Canada as well as 16 Systemedia Group facilities worldwide.