IBM signs $US810m Sequent merger deal

IBM signs $US810m Sequent merger deal

IBM last week announced it has agreed to merge with Sequent Computer Systems in a $US810 million deal that bolsters its presence in the Unix and Windows NT markets.

IBM will pay $18 cash for each Sequent share, according to Bob Stephenson, IBM senior vice president and group executive for the IBM Server Group.

IBM will sell Sequent's server products worldwide following completion of the merger, which is subject to reg-ulatory and shareholder approval, Stephenson said.

Sequent technology will also be integrated into IBM products. In addition, IBM will provide middleware support for Sequent's product line.

The two companies have already been working closely together on Project Monterey. Begun in October 1998, the project is expected to produce a Unix operating system that can use either IBM's 64-bit chip architecture or Intel's upcoming IA-64 chip, presently known as Merced.

In May the project demonstrated Monterey code running on a Merced simulator.

The merger will accelerate work on the 64-bit Unix OS project, which is being developed with Santa Cruz Operation and Intel.

Stephenson and Casey Powell, chairman and chief executive officer of Sequent, said the merger brings together two companies with complementary server technology and similar commitment to the Unix market.

IBM's global strength will push Sequent's 64-bit work to fruition, Powell said, responding to a question from a reporter about why Sequent is interested in being bought at a time when that project is moving along and headed toward a product release.

"With this merger, we'll offer our customers the most complete and powerful server line," Stephenson said, adding that products from desktop machines to supercomputers will spring from the pairing.

According to IDC Australia, the purchase fills a gap in IBM's server product line, and reduces opportunities for its competitors to gain a foothold in some IBM accounts.

Mike Cleary, IDC's marketing services manager, said in a statement the deal will allow IBM business partners to add Sequent services to their product set and give IBM an opportunity to boost its market share in the server market.

Susan Frankle, an independent server analyst based in Boston, agreed that the Sequent acquisition is positive for IBM, giving it access to interesting technology in the Unix and high-end Windows NT areas. Sequent also has some interesting high-availability technology, she said.

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