Digital to Buy Part of Philips Computer Unit
Continuing its rapid expansion in Europe, Digital Equipment Corp. said Tuesday that it plans to buy a large part of the computer operations of troubled Dutch technology giant Philips Electronics NV.
Financial details of the sale, expected to be final by early October, were not released, although one analyst estimated that Digital paid about $250 million for the 7,000-employee Philips operation.
Although the Philips computer business has been losing money, analysts said the deal will give Digital a stronger presence in the European retail banking industry with its newly acquired network of Philips-made automated teller machines.
The deal, which follows Digital’s purchase last year of a majority interest in the computer operations of Germany’s Mannesmann AG, is also sure to increase Digital’s business in Northern Europe with Philips’ line of minicomputers and computer network products.
While Digital has been operating in Europe for years, analysts said the company has moved to strengthen that business as the European economy surged. Europe seems poised to continue growing under the new, trade-promoting economic integration program debuting in 1992.
“They are incrementally building a base in Europe that will be based on special strengths in individual countries,” said Ulric Weil, a technology analyst in Washington.
Earlier this year, other analysts speculated that Digital would buy a stake in Olivetti, the Italian technology giant. However, that purchase was deemed remote in the wake of the Philips deal and Digital’s ongoing financial problems and downsizing in the United States.
Wolfgang Jaeger, Digital’s vice president of strategic alliances in Europe, said the planned takeover was part of his company’s overall strategy to target the European banking and small-business sectors.
Jaeger said the Philips acquisition gives Digital access to customer-oriented computerized banking that neatly fits with the company’s established strength in providing the large computers that work behind the scenes in a bank.
