Compaq Computer has announced that it has reached a definitive agreement to buy online retailer Shopping.com in a stock-for-cash deal valued at about $US220 million.
Compaq said that with the acquisition it aims to leverage the user traffic generated by its AltaVista Internet guide and its Internet PCs. Utilising Shopping.com's transaction capabilities, AltaVista will be able to directly complete e-commerce transactions, according to a Compaq statement.
Compaq plans to buy all outstanding Shopping.com stock for $19 a share. The company has formed an agreement with significant shareholders who combined account for 27 per cent of the fully diluted shares of common stock of Shopping.com. The terms of the agreement are subject to various conditions, including Compaq receiving at least 90 per cent of the issued and outstanding shares of Shopping.com's common stock.
Shopping.com's merger with Compaq will enable it to grow faster and become more efficient than stand alone e-commerce companies, according to a Shopping.com statement. Shopping.com competes with Internet retailers CDNow and Amazon.com.
The retailer's board of directors unanimously approved the acquisition and will recommend shareholder acceptance. Pending certain regulatory approvals, Compaq anticipates the agreement's approval within 30 to 45 days, according to company spokesman Jim Finlaw.
Compaq will remain objective as far as providing AltaVista users an option of using Shopping.com retail services through a link on the Web page, Finlaw said. The company plans to keep the Shopping.com brand name and create a division within the consumer products group. There will be no changes in Shopping.com management, who will report to Rod Schrock, Compaq's senior vice president and general manager of the consumer products group, Finlaw said.
"The tremendous depth and breadth of Shopping.com's product offerings held a major attraction for Compaq," Finlaw said. The company plans to have Shopping.com continue to list all its current product offerings, which range from computers, books and office supplies to CDs and housewares.
Shopping.com features 63 warehouse stores carrying more than two million brand name products and is supported by 1000 merchant partners. Shopping.com uses direct vendor shipping and secure online payment protection.
Shopping.com can be reached at http://www,shopping.com/. Compaq, in Houstan, Texas, can be reached at +1-281-370-0670 or at http://www.compaq.com/.