The computer giant, IBM, has succeeded in its “takeover bid for Lotus Development Corporation announcing the deal at a press conference in Boston, IBM and Lotus executives, Louis Gerstner and Jim Manzi said that the two company reached a “definitive agreement”

IBM had been negotiating unsuccessfully on a variety of business links with Lotus for five months,  when it suddenly announced a complete and hostile takeover bid. After Lotus rejected IBM’s initial buyout offer of 3.3 billion dollars – twice Lotus’ market value -  Lotus’ *stock price doubled to $61.44.

In less than a week, IBM had raised its offer to 3.52 billion dollars and the agreement was sealed on friendly terms. With sales in 1994 of nearly a billion dollars, Lotus is ‘the sixth largest manufacturer of software, but it has the second largest-market share of PC applications.

In economic terms, Lotus is *therefore a valuable acquisition for IBM. More importantly though, Lotus makes the revolutionary new product ‘Notes’. Notes “allows a large number of computers to share and work on the same information simultaneously, opening up a major new field in computer conferencing, database processing and e-mail exchange.

The deal between IBM and Lotus is the largest ever in the software industry. Nevertheless, IBM’s Gerstner stressed that the aim of the takeover would be “to provide high quality services to customers,” combining the strengths and know-how of the two companies.

Lotus’ Manzi added that although the buyout  would involve certain restructuring at Lotus, there would be no job losses. The new combination is a significant coup for IBM, as it places the Big Blue in a position to challenge its rival, Microsoft, which currently dominates the market.