Compaq, Digital bosses claim end-to-end coverage

Under terms of the deal, Digital will become a wholly-owned subsidiary of Compaq and will keep its brand name and focus, the firms said. The deal - for which "both boards voted enthusiastically" - is expected to be completed in the April-June quarter of this year.

Eckhard Pfeiffer, chairman and CEO of Compaq, said the purchase gave his company "a huge customer base, a global customer services and support organisation, and total solutions capability". He added that the buy meant Compaq was "clearly number two" behind IBM as a computer maker, with combined revenues of about $37 billion. Compaq was "significantly ahead of schedule" in succeeding in its long-stated bid to be one of the world's top three computer makers, he added.

"Lots of people have said it makes sense for DEC and Compaq to go through with this sort of combination and we saw this as a positive sign. We now have one of the largest channel organisations in the world and strong vertical markets in communications and manufacturing as well as Internet, messaging, Unix and storage."

Pfeiffer also noted that Digital's strength in Unix and the mid-range and high-end would give Compaq a chance at winning contracts where previously it had been stymied by its bias to Windows NT. "We couldn't win [some large] deals with our NT offering in terms of scalability and robustness. Now we will be on every customer's planning table."

Digital chairman Robert Palmer was equally enthusiastic.

"This helps us achieve our goal of global leadership in enterprise computing," Palmer said. "Together we're much stronger than we were separately. Viability questions will no longer be an issue. We will have a much better chance against Hewlett-Packard, IBM, Dell and Sun. When we are on the short list, we often win."

The companies said no announcement was currently being made on how many redundancies, if any, the merger will cause.