Hewlett-Packard Co has reached definitive agreement to acquire Chelmsford, Massachusetts-based Apollo Computer Inc for about $476m in cash in what will be the biggest acquisition in the history of the Palo Alto company. Apollo effectively put itself up for sale last November, but its quest for a buyer or a major new investor was expected to take it overseas, with major customer Siemens AG seen as a likely candidate. Hewlett-Packard says it will start the $13.125 cash tender offer within five days; the price represents a generous premium over the $8.125, unchanged, at which Apollo closed Tuesday night. Hewlett says it intends to operate Apollo as a separate division within Hewlett Packard’s workstation group, but the acquisition is one in which one and one seem to make less than two, because both companies major on Motorola 680X0 family Unix workstations and compete for a significant proportion of their business. The companies are already close, both being founder sponsors of the Open Software Foundation alternative Unix club. The acquisition will put muscle behind the innovative Apollo Network Computing System for tying dissimilar computers in a heterogeneous network and directing work to the type of machine best able to handle it. Once the arch-rival of Sun Microsystems, Apollo had fallen badly behind in the past three years and reported a 90% fall in profit to $2.1m on sales up only 18% to $653m for 1988. Adding in Apollo should take Hewlett’s turnover to around $11,000m this year – not all in computers, putting it ahead of Unisys Corp and just behind DEC in size.
