BUILDING A PC POWERHOUSE : PACKARD BELL JOINS FORCES WITH NEC.Byline: Laurence Zuckerman The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times Packard Bell Electronics, which dominates the American market for home computers but has not been consistently profitable, announced Tuesday that it would merge with the foreign PC operations of the NEC (NEC Corporation, Tokyo, www.nec.com, www.necus.com) An electronics conglomerate known in the U.S. for its monitors. In Japan, it had the lion's share of the PC market until the late 1990s (see PC 98). NEC was founded in Tokyo in 1899 as Nippon Electric Company, Ltd. Corp. of Japan, which has had little success outside its home market. The deal would create a new company called Packard Bell NEC (Packard Bell, The Netherlands, www.packardbell.com) A major PC manufacturer that is the consumer brand of NEC Computers International and the home computing market leader in the U.K. and much of Western Europe. that could be a powerhouse in the global PC business and give NEC a stronger foothold in markets that also are coveted cov·et v. cov·et·ed, cov·et·ing, cov·ets v.tr. 1. To feel blameworthy desire for (that which is another's). See Synonyms at envy. 2. To wish for longingly. See Synonyms at desire. by Japanese rivals. The deal was the latest in a series of multimillion-dollar investments in Packard Bell by the Japanese electronics giant and Groupe Bull of France. Under the deal, NEC will swap $300 million worth of assets outside of Japan for a larger stake in the new operation. To the surprise of many analysts, the new arrangement leaves Beny Alagem, the maverick co-founder of Packard Bell and its chairman and chief executive, in control of the new company. Alagem, who will be chairman and chief executive, will control five seats on the board of the new company, which will be based at Packard Bell's headquarters in Sacramento. NEC and Groupe Bull will each control two seats. But the new deal gives NEC another block of nonvoting preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. that, added to previous holdings, would amount to a controlling stake of more than 40 percent, if Packard Bell NEC makes a public offering. Alagem said he intends to go public in the next two years. At a press conference in New York on Tuesday, Alagem said that the new agreement would allow the company to move from being a leading supplier of consumer PCs into more lucrative sales to corporations and governments. Zenith Data Systems Zenith Data Systems (ZDS) was a division of Zenith founded in 1979 after Zenith acquired Heathkit, who had, at that time, recently entered the personal computer market. Zenith sold personal computers under both the Heath/Zenith and Zenith Data Systems names. , owned by NEC and Bull, will provide Packard Bell with notebook computers and servers, which link networks of desktop computers, broadening Packard Bell's offerings. ``We can now grow and compete in new markets, channels and territories,'' Alagem said. The deal could also make the new company into the world's fourth-largest PC vendor, behind the Compaq Computer Corp., IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) and Apple Computer Inc. Alagem said the new company would have $8 billion in revenues over the next year, compared with Packard Bell's 1995 revenues of $4.6 billion. Based on 1995 figures, the new company would have 15.1 percent of the American personal computer market, while NEC and Packard Bell-NEC together would have 11.4 percent of the world market. ``We intend to establish the biggest PC manufacturing bloc in the world,'' said Hisashi Kaneko, NEC's president, in Tokyo on Tuesday. CAPTION(S): Photo Photo: (Color) Packard Bell CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Beny Alagem announces a mer ger pact with NEC, a Japanese PC firm. Associated Press |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion