Deal-making season

Welcome to the first Booth`s Bites of 2005, which includes coverage of the last five weeks. Despite this time supposedly being a quiet period, there has been an unprecedented flurry of activity, particularly on the international front that has seen over 100 deals.

AST`s empowerment deal

This transaction involves a rights offer and AST-A`s purchase of certain IT business and interests from various Gijima subsidiaries and will result in giving the latter between a 32% and 36.7% stake in the AST Group.

Gartner swallows Meta

The world`s largest and one of the other leading ICT research and analysis companies join forces in a $162 million deal to create an entity whose combined annual revenue is now near to $1 billion.

The world`s third largest PC supplier

IBM`s PC business has been sold to China`s Lenovo Group in a deal valued at $1.75 billion. This deal will make Lenovo the world`s third largest PC supplier behind Dell and HP and is the biggest-ever overseas acquisition by a Chinese technology company despite IBM retaining an 18.9% stake in the company.

I wonder if some of the other leading PC suppliers such as HP might choose to peruse a similar sell-off strategy?

Paul Booth, MD, Global Research Partners

I wonder if some of the other leading PC suppliers such as HP might choose to peruse a similar sell-off strategy? Also, look out for a possible US-listing by Lenovo, especially as it is moving its corporate HQ to the US.

Furthermore, will this deal change the way the IBM PC products are marketed and sold in this country and will Lenovo open a local office? It seems the IBM PC unit had not made a profit for some time.

Oracle finally succeeds!

In a reversal of previous statements, Oracle increased the value of its bid for PeopleSoft, which was accepted; committed to new versions of JD Edwards and PeopleSoft; and announced plans for a merged product in about three years.

Sprint Nextel

This is the name of the new company formed from the merger of Sprint and Nextel Comms, the number three and number five wireless carriers in the US, in a deal valued at about $35 billion.

The new entity creates a real competitor for Verizon Wireless (a JV between Verizon and Vodafone) and Cingular Wireless (a JV between BellSouth and SBC Comms).

The new president and CEO of Sprint Nextel is Gary Forsee, the ex-chairman and CEO of Sprint, with Timothy Donahue, the ex-president and CEO of Nextel, taking the chairman`s position.

Symantec and Veritas

Hot on the heels of the finalisation of the Oracle/PeopleSoft merger is the even-bigger merger (+/-$13.5 billion) of Symantec with Veritas Software. The latter is the number two storage software maker, behind EMC, and is only slightly smaller than Symantec in terms of revenue.

It seems that regulatory compliance issues (part of the new grudge cycle) are forcing organisations to look at storage and security together. It seems that EMC, Hitachi Data Systems, HP and IBM, among others, were eyeing Veritas as an acquisition target. Maybe this merger was the reason for the recent sudden departure of the local Veritas Software country manager, Dave Reddy?

* A satisfactory set of interim numbers from FrontRange. This is a four-month period only reflecting a year-end change to end-April, but shows the company back in the black with revenue growth of about 10%.

* A mediocre set of year-end numbers from Elexir Technology Holdings. Revenue down by over 50% but profit up, although headline earnings show a loss for the period.

* An interim loss from DataPro. This still represents the situation with Casey prior to its collapse and doesn`t contain any input from DataPro.

* An interim loss from Global Technology, probably the last set of financial numbers before its demise. Revenue was also well down.

* A full-year loss from Cell C, although exact figures were not disclosed.

* A proposal by Prism Holdings to sell off 16.9% of its shares to the Mineworkers Investment Company.

* Rumours of a tie-up by Cell C with Virgin Mobile.

* The announcement of new distributorships including those by Corex for Asus; Sahara Computers for Maxtor.

* A job loss announcement from Telkom SA involving its management.

* The name change of MGX to Metrofile.

* The termination of the listing of Uniserv.

* The resignations of Vince Raseroka, MD of Cell C, and David Vink, acting CEO of CS Holdings.

* Telkom SA and Vodacom announced they will bid for state-owned Nitel (Nigeria).

* A delay to the IPO by Maroc Telecom on the Casablanca and Paris exchanges following substantial interest in its shares.

* A 6% investment in MTN Swaziland by King Mswati III of Swaziland.

* Microsoft lost its appeal against the anti-trust sanctions imposed by the European Commission last year.

* Samsung Electronics will invest $24 billion on new semiconductor production facilities by 2010.

* Royal Philips Electronics reduced its 31.9% stake in Atos Origin to 15.4%.

* Deutsche Telekom sold off its 12% stake in Russia`s Mobile TeleSystems for approximately $1.4 billion, reducing its shareholding to about 13%.

* The Japanese government sold off up to 1.12 million NTT shares worth about $4.3 billion, reducing its shareholding to 33.3%.

* The corporate name change of Matsushita Electric Industrial to Panasonic worldwide with the exception of the parent company and its subsidiaries in Japan.

* Tulip Computers sold its Commodore brand to Yeahronimo Media Ventures. Commodore was a household name for PCs in the 1980s.

* A restructuring at Motorola that will create four distinct business groups: personal devices, networks, connected home, and government and enterprise.

* The filing of an IPO registration statement from PanAmSat.

* Potential IPOs in New York from BPO player, Exlservice Holdings; Hutchison Whampoa`s Italian 3G unit in Milan; and China`s Watchdata Technologies on Nasdaq.

* Global Linux hardware and software market likely to exceed $35 billion by 2008 (IDC).

* Linux server market expected to reach $9.1 billion by 2008 (IDC).

* Gartner predicts a 23% growth in 2005 for the chip market.

Final word

I cannot remember a period of so much activity within the ICT sector as we have experienced over the last few weeks. Although much of it has, to date, been overseas-oriented, it`s only a matter of time before some of it impacts our local situations. Watch this space carefully as we are in for an interesting year!