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Size matters: Wang

Size matters: Wang

Wang Global is anticipating a boost in Australian revenues after the company agreed to a $US2 billion buyout offer from Dutch information services company Getronics last week.

Getronics offered $US29.25 a share for Wang to create a company worth over $US5 billion with 33,000 employees operating in 40 countries and specialising in desktop and network services.

The deal will see Getronics - a systems integration and consulting specialist with 12,500 staff - attempt to swallow Wang's $US3.5 billion in revenues and 20,000 employees spread across 1000 facilities worldwide.

Getronics planned to make a public tender offer for Wang Global stock on May 10, and anticipates it closing by June 7.

Robin Dixon, Wang Australia's managing director, indicated the move is likely to lift the company's growth prospects. "To survive and prosper in the network services and desktop space you need size on your side," he said.

He claimed the buyout will otherwise have little effect on local operations, stating it's "business as usual".

The only outstanding issue for Wang is the possibility of a name change.

"That's yet to be decided," Dixon said.

It is understood Getronic's chief executive, Cees Van Luijk, has been aggressively trying to expand the company's business from its computer reseller roots.

But the main challenge, Van Luijk said, is to raise the margins earned in the Wang Global side of the business. Getronics is used to earning margins of around 18 per cent, while Wang Global was at around 6 per cent last year, before tax, interest and depreciation were deducted.

The deal still needs approval by US and European regulatory bodies, and may also require the cooperation of Olivetti SpA, which retains a 20 per cent stake in Wang Global.


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