3Dfx buys STB

3D graphics leader 3Dfx will buy rival manufacturer STB for £85m it was announced today. The deal is expected to close in March 1999.

STB's track record of "worldwide manufacturing and distribution" were key to the deal, according to 3Dfx president Greg Ballard, who believes the acquisition will "position 3Dfx as one of the top suppliers of graphics technology in the world".

Osman Kent, CEO of 3D Labs believes consolidation between chip manufacturers and board manufacturers is good news for the PC graphic industry: "Integration has many advantages," Kent said. "You can get products to market more quickly and avoid margin stacking." It also improves customer relations as chip companies traditionally have little to do with consumers, Kent added. Ultimately it will not mean cheaper products though as the margins saved will go towards R&D, which is becoming increasingly expensive according to Kent.

STB's operations will remain based in Richardson, Texas although the combined companies' headquarters will be at the 3Dfx site in San Jose, California.

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