It has been a long time coming, but Wang Laboratories Inc has finally signed an agreement with Ing C Olivetti SpA to merge with the Italian company’s Olsy systems and services division, making a $3.6bn network and desktop services company. It becomes number four worldwide and instantly joins the hallowed ranks of the Fortune 500 companies. Olivetti has been waiting to divest itself of Olsy since the company agreed get rid of its personal computer division and other non commercial businesses to try to stem its cash hemorrhage a couple of years ago (CI No 3,013). It has been talking to Wang for more than a year now, and the deal was originally set to complete before the end of last year (CI No 3,294). Wang will buy 100% of Olsy in exchange for 8.75 million common stock equivalents and 5 million stock appreciation rights, as well as $70m cash and a further $56m on an earnout basis in the Year 2000. Olivetti will also take an 18.6% share in the new company, to be named Wang Global, making it the single largest shareholder. Microsoft Corp also has a 10% share in the company. Thus far, the combined businesses will have 22,000 employees. Wang UK managing director Roger Whitehead said it was far too early to comment on how the merger would pan out and whether there will be any job losses. Gaining Olsy opens up Europe for Wang, and gives it presence in more than 43 countries. Whitehead said many bids these days are cross-boundary bids, and any company wishing to bid for major global contracts needed a completely global offering. Wang has specialized in network design and infrastructure integration and implementation, outsourcing and desktop services. Olsy adds application management in vertical markets such as financial services, retail and government. The combined company therefore claims to offer a true ‘one-stop-shop.’ Under the agreement, Wang will also acquire a 19.9% stake in Olivetti Ricerca, an Italian consortium supplying research and development services to both the IT and telecoms sectors.
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