Compaq Computer Corp. will buy Digital Equipment Corp. for $9.6 billion in a deal that would make Compaq a world leader in making computers, the companies announced Monday.
Compaq already is the world's biggest maker of personal computers and has said it wants to be among the three largest computer manufacturers overall by the turn of the century.It has been expanding rapidly into selling more powerful business machines, and that is Digital's specialty.
Compaq said it planned to pay $4.8 billion in cash and issue 150 million shares of common stock for Digital. Digital shareholders would get $30 a share in cash and 0.945 Compaq shares for each Digital share.
Based in Houston, Compaq ranks fifth in the overall computer industry today with sales of $24.6 billion last year.
Maynard-based Digital had $13.1 billion in revenues last year.
Only last year, Compaq bought Tandem Computers in a $3 billion stock deal that doubled its sales force.
Digital, once the world's third largest computer maker, has shed half its work force since its heyday in the mid-1980s.
The agreement comes three months after Digital sold its Alpha microchip manufacturing operations to Intel Corp. for $1.5 billion in an agreement that also settled Digital's copyright infringement suit against Intel.
Digital will become a wholly owned subsidiary as part of the transaction. The deal is subject to approval by shareholders and government antitrust regulators.