Despite the fact that Compagnie des Machines Bull SA regularly has to go beret-in-hand to the French government for more cash, the company agreed in priciple to pay an undisclosed sum for a 19.9% stake in Packard Bell Electronics Inc, the Chatsworth, California maker of cheap and cheerful personal computers. Packard Bell claims to be number three in the US market in terms of number of machines installed, and the cash injection is to seal a deal under which Bull’s Buffalo Grove, Illinois-based Zenith Data Systems will pool its desktop design resources with those of Packard Bell, and sell the latter notebook computers on an OEM basis; Zenith already supplies IBM Corp with some of its notebooks OEM. International Data Corp reckons Packard Bell had 5.2% of the US market last year, but the two companies combined are thought to have less than 3% of the world market. The prospectus for Packard Bell’s failed initial public offering last year said it had a negative net worth of $4m and a debt load of $93.3m at the end of 1991. It had hoped to raise $80m or so. Before the effects of the alliance, Packard Bell expects 1993 revenue to exceed $1,200m, up from $930m last year. Zenith Data had sales of $900m last year. The companies will share research, development and production costs, but without plant consolidations, the savings are likely to be modest. Details such as where the new group would operate or what facilities will be used to manufacture the computers, have not been settled. New designs would be marketed by each firm under its own name through its own sales channels. Bull does not expect to buy more of Packard Bell, but that is not ruled out.
