Market Overview

This Day In Market History: Compaq Buys Digital Equipment

This Day In Market History: Compaq Buys Digital Equipment

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened?

On this day 21 years ago, Compaq acquired Digital Equipment in the largest buyout in the history of the computer industry.

Where The Market Was

The Dow closed at 8,811.77. The S&P 500 traded at around 109.41. Today, the Dow is trading at 26,062 and the S&P 500 is trading at 2,886.

What Else Was Going On In The World?

In 1998, The European Central Bank was established in Frankfurt. Exxon and Mobil merged to create the world’s largest petroleum company, Exxon Mobil Corporation (NYSE: XOM). A gallon of gasoline cost $1.15.

Compaq Goes Big

In June of 1998, Compaq announced a $9.6 billion buyout of Digital Equipment, a major player in the U.S. computer industry since the 1950s. At the time of the deal, it was the largest buyout in the history of the computer business. Digital Equipment was part of a series of buyouts Compaq had made in a push to gan enterprise customers. DEC was a particularly compelling target for Compaq due to its overseas presence, which Compaq was lacking at the time.

In the conference call following the announce, Compaq said the combined revenue of the two companies in 1997 was $37.5 billion.

Unfortunately, the aggressive M&A strategy put Compaq in a difficult financial situation when the Dot Com bubble burst a couple of years later. In 2002, HP Inc. (NYSE: HPQ) acquired a struggling Compaq for $25 billion.

Related Links:

This Day In Market History: The IPO

HP's Q2 Print, 3-D Printing Business Trigger Maxim Upgrade 

Posted-In: Compaq this day in market historyEducation Top Stories Markets Tech General Best of Benzinga


Related Articles (HPQ + XOM)

View Comments and Join the Discussion!
Lightning Fast
Market News Service
$199 Free 14 Day Trial
Book A Demo
Learn How You Can Succeed In The Market With Benzinga Pro

Fastest Market News

Real-Time News Alerts

Customizable News Filters

Book A Demo

Report: Barnes & Noble Considering Higher Offer From Readerlink

Eaze Announces CBD Line For Athletes, Partnership With Celtics Legend Paul Pierce