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

To: Andreas who wrote (53284)	3/14/1999 4:03:00 AM
From: Aitch	Read Replies (2) \| Respond to of 97611

Fair comment... I am not sure if the DEC figure of $18B was to be immediately accretive... There were also one time charges involved with the acquisition. I am sure other, more knowledgable CPQ threadsters will be able to comment more intelligently. H

To: Andreas who wrote (53284)	3/14/1999 10:18:00 PM
From: rudedog	Respond to of 97611

Andreas - The predictions for CPQ hitting $50B always included an acquisition of a big legacy player to get there, with DEC as the lead candidate. CPQ was projected to do $24B in 1998 before the merger, as best I can recall. DEC was at about $12B. So there appears to have been nothing lost and maybe a little gained. Where did you come up with the $18B number? There was a serious discussion with DEC in 1995 and 1996 which eventually fell apart. CPQ at that time wanted to buy the service business and would have paid a handsome premium for it. Once they determined that they had do do "all or nothing" they had to spend some time re-grouping. Tandem gave them a strong technology base which might have allowed them to do a couple of smaller service deals (say Unisys) and then build strongly. I think that DEC came back with an offer that was just too good to turn down - essentially getting a company with $12B in revenue for about $3B in cash.