Federal Trade Commission May Approve Intel-DEC Settlement This Week

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April 23, 1998 (12:00 AM EDT)

Federal Trade Commission May Approve Intel-DEC Settlement This Week

By Kimberly Caisse,

The Federal Trade Commission may approve the Intel-Digital Equipment patent lawsuit settlement by the end of this week, industry sources said.

FTC approval of the Intel-Digital deal clears the way for the government agency to speed up its review of Digital's pending merger with Compaq sources said.

A Digital spokesman said the two deals are not related. If the Intel-Digital settlement fell through, the Compaq-Digital merger would still move forward, he said.

Once the FTC signs off on the estimated $9 billion Digital-Compaq merger, shareholders will get a chance to vote on the deal, sources said. Accumulating shareholder proxies is expected to take about six weeks, possibly putting final approval of the merger in mid- to late-June.

When the merger was announced in January, Compaq and Digital officials said they expected it to be completed in the second quarter.

Although Intel officials declined comment on the status of the decision, they continue to be optimistic about government approval of the deal. Digital's spokesman said he had not heard if FTC approval would occur this week, but added the company is optimistic the settlement will be approved.

Digital ( company profile) and Intel (company profile) officials said October it could take six months for the FTC to approve the settlement, which was reached after Digital sued Intel last May for infringing on 10 of its patents. The six-month window closes May 10.

Under the terms of the settlement, Intel agreed to buy, for $700 million, Digital's semiconductor operations, including the Alpha processor plant in Hudson, Mass. The companies also agreed to cross-license patents for 10 years, and develop future systems based on Intel's 64-bit microprocessors. Digital will retain the design rights and marketing responsibilities for the Alpha technology.