Digital lined up for Compaq buy-out

Compaq is eyeing-up Digital Equipment's networking unit for acquisition, Wall Street rumours suggest.

The company is widely believed to have been in acquisition talks with Digital, and although most speculation has centred on server operations, some observers suggest that Digital's advanced and well respected networking products may be a greater attraction for Compaq.

Eckhard Pfeiffer, president and CEO of Compaq, has maintained he is in charge of a networking company since he took over the reins six years ago.

The main appeal for Compaq is Digital's strength in the Internet arena.

The company will release an ATM Lan switch tomorrow, and has a range of FDDI products, which Compaq lacks, as part of its Fast Fibre server strategy.

The technology means that packet-based TCP/IP networks will be able to use IP switching software, a position that Cisco currently dominates.