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To: Thai C. Nguyen who wrote (19309)	1/26/1998 9:18:00 AM
From: Henk Kruisbrink	Respond to of 36349

*** OFF TOPIC *** Compaq Buys Digital for $9.6 Billion I got this one via an email: (01/26/98; 8:29 a.m. EST) By Douglas Hayward, TechWeb Compaq Computer continued its acquisition-led move into the corporate computing market Monday, when it acquired Digital Equipment for $9.6 billion in a deal described as the largest-ever acquisition in the history of the computer industry. Shareholders of Digital will receive $30 in cash and approximately 0.945 shares of Compaq common stock for each share of Digital stock, under the terms of the transaction outlined Monday. Compaq will issue around 150 million shares of Compaq common stock and will spend $4.8 billion in cash to finance the deal. Digital will become a wholly-owned subsidiary of Compaq. Eckhard Pfeiffer, president and chief executive of Compaq, said in a statement issued Monday morning that his company "put tremendous value on the customer relationships Digital has cultivated over the past 40 years. We are committed to supporting these key customer relationships by investing in Digital's strategic assets, particularly its worldwide service organization.". According to Compaq, the acquisition would make it the second-largest computer company in the world, with the largest third-party reseller network of any computer company in the world. Over 80 percent of the combined company's products would be sold indirectly, the two companies said. Earl Mason, chief financial officer of Compaq, added that "the combined companies will provide significant economic value growth for our shareholders. The combination will be accretive within a year, meeting all of Compaq's economic tests." Robert Palmer, Digital's chairman said the acquisition "gives us the scale and resources to make continued investments in our key technologies and services. Together we will offer customers the greatest concentration of enterprise Windows NT products and life-cycle services available in the market today." Although Compaq is the world's largest maker of PCs, the company has long wanted to extend its influence upwards into corporate data centers. Monday's mega-deal, which will have to be cleared by regulators in North America and Europe, comes less than a year after the acquisition of high-end server maker Tandem Computers, which gave the company a significant foothold into corporate IS departments. The transaction is expected to complete in the second quarter of this year, the two companies said. Compaq describes itself as the fifth-largest computer company in the world. In 1997, it reported worldwide sales of $24.6 billion.