A major new force in the global computer industry is to be created through the acquisition by Compaq Computer of Digital Equipment. The biggest takeover to date in the computer sector - valued at $9.6 billion (£7 billion) - will move the merged operation of the two US firms into the top three computer firms worldwide.
Compaq already ranks as the top international manufacturer of personal computers and the purchase of Digital will give it a significant share of the market for business computer systems.
The outcome of the merger will also be vital for the Irish computer sector, with Digital employing 1,100 people in a software centre in Galway and a sales and support operation in Dublin. Compaq employs 250 staff in a call centre in Dublin with a target employment of 650 people.
The companies said it was too early to assess the implications for their Irish operations, but in a statement Digital Ireland said the combination will provide significant new business opportunities.
Digital is the second largest seller of computer systems to business in Ireland, while Compaq, in addition to its call centre, has a thriving personal computer sales business here.
Internationally, Compaq is already the world's biggest PC maker, but recently it has decided to target faster growing and more profitable areas of the computer markets. Digital represents the ideal choice for Compaq, providing it with a major share of the market for more powerful business machines and of the servicing business for major companies worldwide.
The products of the merged company will range from small laptop computers to the servers on which large companies run their systems .
Already Compaq ranks fifth in the overall computer industry, with sales of $24.6 billion for 1997.
With the acquisition, the combined turnover of Compaq/Digital would be approximately $37.5 billion on 1997 figures.
While the deal is subject to the approval of Digital's shareholders and clearance under anti-trust laws, it is unlikely to be halted.
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