Packard Bell sells 20% stake to NEC for $170 million; deal gives Japanese firm unprecedented access to the U.S. PC market

Article Abstract:

NEC has purchased one-fifth of $850 million Packard Bell Electronics for $170 million in an effort to break into the US PC market. Another 20% of Packard Bell has been owned by French firm Groupe Bull since July 1993. NEC currently sells 90% of its PCs in Japan, but seized the opportunity to get a piece of Packard Bell when the US firm needed more capitalization to support its continued growth in the home PC sector. Packard Bell's 1994 net income reached $44 million, following a break-even year in 1993 and six previous years marked by losses. Packard Bell's meager 1.5% return on sales reflects a fairly high 17% product return rate, but the company's PCs are highly valued by retailers because of Packard Bell's favorable warranties and retailer margins. HP plans to challenge Packard Bell's 50% share of the retail PC market with its own rigorous home PC marketing campaign. Analysts predict that Packard Bell will continue to ship the greatest number of PCs in the US through at least 1995.

Microcomputers, Company financing, Company Financial Information

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Packard Bell reaches $650 million accord with Bull, NEC for much-needed cash; PC firm to get Zenith Data in pact likely to propel it past no. 1 Compaq

Article Abstract:

Packard Bell completes a complicated financial arrangement through which the company will receive a cash infusion from NEC and Compagnie des Machines Bull and acquire the unprofitable Zenith Datasystems. The acquisition of Zenith is expected to allow Packard Bell to displace Compaq as the single largest PC vendor in the US market, with annual revenues increasing from $4 billion to $5.5 billion. Company executives expect both Packard Bell's and Zenith's overall sales to increase, as Zenith benefits from Packard's home market presence, and Packard leverages Zenith's considerable corporate and government market strengths. Analysts suggest that the estimated $650 million investment from NEC and Bull, combined with a rumored $470 million loan from Intel in 1995, leaves Packard in perilous fiscal straits.

Electronic Computer Manufacturing, Computers & Auxiliary Equip, Mergers, acquisitions and divestments, Company investment, Compagnie des Machines Bull, Zenith Data Systems Corp., Company Acquisition Merger

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Fujitsu expects to post a loss in current year

Article Abstract:

Fujitsu Ltd expects to post a consolidated pretax loss of 20 billion yen ($169.7 million) for FY 1993, ending Mar 31. A spokeswoman blames the company's first annual lost since it was listed in 1949 on Japan's recession and, in particular, weak demand for computers. Fujitsu also expects to post group sales of 3.45 trillion yen, down from 3.6 trillion predicted earlier. Analysts say the same problems are besetting both IBM and Fujitsu, the world's first- and second-biggest computer companies, respectively. In particular, both IBM and Fujitsu emphasize mainframes at a time when users are switching to smaller computers. Fujitsu disputes the analogy. The company may have also been hurt by its attempt to make a huge array of products.

Forecasting, Fujitsu Ltd., Losses, Annual Report

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