Wang Laboratories has agreed to buy Olivetti S.p.A. information technology unit in a $390 million deal that will make the Italian company Wangs largest shareholder with an 18.6 per cent stake, the two companies said Monday. The combined business will generate over $3.6 billion in annual revenues and employ 20,000. Under the agreement, Wang will buy from Olivetti 100 per cent of the Olsy Group in exchange for 8.75 million stock equivalents, 5 million stock appreciation rights, cash of $70 million and an earnout of $56 million payable in 2000. The stock appreciation rights give Olivetti value for the increase in the market price above $30 per share at any time from March 2001 to March 2005. The earnout is subject to the company exceeding certain growth targets. Reuters
The new company will be called Wang Global. The Wang Global name will be used worldwide, except in Italy, Japan and Brazil where it will operate under the name of Olivetti Wang Global. Two directors nominated by Olivetti will be elected to the Wang board, the companies said. The deal is expected to close by the end of March 1998.
Wang will also acquire a 19.9 percent stake in Olivetti Ricerca, the Italian consortium supplying research and development services to both the information technology and telecommunication sectors.