By Tony Hallett, 4 May 1999 16:39
NEWS Wang Global and Dutch company Getronics today announced they are joining together to form a $5bn computer services outfit. In effect, Getronics is buying Wang for about $2bn in cash. The move is an ironic one - not merely because the Dutch firm is about half Wang's size - as Wang itself has acquired almost a dozen companies over the past six years to keep its business alive. In the eighties, Wang was a colossus of the IT industry, but an uncompetitive hardware business made way for a focus on outsourced services. For its most recent quarter ended 31 March, the company reported a net loss of $57.7m on revenues of $789m. Wang CEO, Joseph Tucci, called the quarter "a dynamic one on several fronts". The Getronics-Wang combination will have 33,000 employees in 44 countries, and annual revenues of approximately $5bn, putting it among the world's top five outsourcing companies, rubbing shoulders with the likes of IBM Global Services and EDS. Matthew Nordan, computing analyst at Forrester Research, said the announcement was expected. "For us it wasn't a case of if Wang would be bought, but when," he said. However, he said that he was surprised by the buyer, instead expecting Dell - the direct vendor which has a services agreement with Wang - to be the suitor. "It now looks like Dell will have to look again at Unisys," Nordan added. The Getronics deal values Wang at 39 per cent above its average share price for the last 30 trading days. CEO Tucci will join the five-person Getronics management board.
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