The speculation over the issue of merger of Digital Equipment (India) Ltd with its global parent, Compaq, in India following the recent global acqusition has been put to rest with Compaq admitting that the `legal merger' is not likely in the near future.
This has left Digital India to continue to remain an independent company in the near future.
Compaq explained that this was mainly because of the difference in takeover codes existing between Federal Trade Commission of the US and the Securities and Exchange Board of India (Sebi).
"The US takeover codes don't apply to India; Sebi has to clarify," the company said. The company, according to sources, is said to be studying the applicability of Sebi's codes regarding the merger of the two companies.
However, even though Compaq and Digital India will continue to exist as two separate companies in legal terms, the `identity' will remain as Compaq.
The management, branding, and other strategices will be under the Compaq umbrella.
"We'll continue with both companies; but we'll have one face," said Som Mittal, the new managing director who is in charge of the combined operations of Compaq and Digital in India.
Earlier, he was the managing director of Digital Equipment India Ltd, a post he held since 1994. "There'll be only one brand: Compaq."
Compaq sources said only when the company takes a decision to `legally merge' the two companies, they plan to hold a shareholders meet besides filing an application to this effect at the high court.
Till then, the two companies will retain individual names.
Mittal also put to rest any speculation over `retrenchment' at Digital India.
Reports from Compaq in U.S. had stated that over 5000 jobs would be cut worldover following Compaq's acquisition of Digital at $ 8.4 billion, software professionals in Digital were a worried lot. However, Som Mittal insisted that Digital's software division in India was very much growing. "Contrary to reports of 300 software professionals `losing' their jobs at Digital, we've strengthened our software division by 30 per cent in the last three months," he said. According to him, Digital had only a total of 300 software people apart from 200 service engineers. The company has a total of 700 people. "This doesn't leave too many people to handle other areas like finance, etc., " he said.
Abhishek Mukherjee, who was managing director of Compaq Computer (India) Pvt Ltd, has informed Compaq of his inability to accept the offered post in Singapore, overseeing Compaq's operations in south east Asia.
"In India, we'll adopt the worldwide strategices and directions of Compaq, suitably adapted to meet local requirements. The immediate objective will be to present a single customer facing organisation. A series of initiatives are planned to unveil our vision to our customers, paratners and employees," Mittal said.
Although, Compaq will remain the brand in India, the Indian operation will continue to market Digital's Alpha system as well as Tandem's, another company acquired by Compaq last year. Regarding the fate of the Digital board of directors, Compaq said while some are likely to retain directorships, there could also be some changes.
