American group Compaq is hailing its planned takeover of the rival Digital Equipment Corporation as the most important acquisition in the history of the computer industry.

If the proposed $9.6bn (£6bn) cash-and-shares deal does not fall foul of US anti-trust laws, Compaq will become the second-largest company in the computer manufacturing industry behind IBM.

Compaq, already the world's largest maker of personal computers, will issue about 150 million shares of common stock and pay $4.8bn in cash for Digital, a maker of computers and network systems for business.

Under the terms of the deal, DEC shareholders will receive $30 in cash and approximately 0.945 shares of Compaq common stock for each share of Digital stock.

DEC will become a wholly-owned unit of Compaq.

Shares in Digital jumped about $8.50 to trade at $54. Shares in Compaq had not traded but were indicated down 75 cents from their New York close at about $30.

The deal is expected to close in the second quarter of 1998 and is subject to the approval of Digital's shareholders.

Compaq president and chief executive Eckhardt Pfeiffer said the merger achieved Compaq's goal of becoming one of the top three global information technology companies.

Compaq reported earnings of $1.9bn on sales of $24.6bn in the year to December 1997. With 2,200 employees in Scotland, it has sales of £1bn in the UK.

DEC reported earnings of $140.9m on sales of $13bn in the year ended June 1997.

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