Symbol Technologies to Buy Rival Telxon

Symbol Technologies Inc. said Wednesday it would buy Telxon Corp., a rival maker of hand-held computers and bar code scanners, in a stock swap worth about $400 million, bringing a friendly end to a bitter two-year battle between the companies.

The deal calls for Symbol to buy Telxon for less than half what it initially offered to pay in June 1998. Telxon rejected the original offer, calling it inadequate, but then fell into a tailspin of financial difficulties that included a steep sales decline and a federal accounting probe.

“We were watching all the time,” Symbol President and Chief Executive Tomo Razmilovic told Reuters. Symbol shares fell in response to the Telxon deal, pressured by antitrust concerns even though company officials said they were confident the deal would clear regulatory hurdles. Symbol shares fell $3.02 to close at $46.86 on the New York Stock Exchange. Telxon shares rose $2.50 to $22 on Nasdaq.

In a conference call with analysts and investors, executives of both Symbol and Telxon said the transaction would enable the combined company to compete more aggressively in the growing world of wireless data transaction equipment.

Products made by both companies are used by checkout clerks as well as employees of the Postal Service and delivery companies.

Terms of the deal call for Symbol to pay a fixed 0.50 Symbol share for each share of Telxon.

With Symbol shares trading at $46.88, the deal values Telxon at $23.48 a share, a healthy premium to the company’s closing stock price of $19.50 on Tuesday.