The latest: IBM Corp. (NYSE:IBM) named Elias Mendoza, who joined the company three years ago from Morgan Stanley (NYSE:MS), to
head its corporate development team. IBM made the move as it battles former M&A chief David Johnson in court, who was lured away by rival Dell Inc. (NASDAQ:DELL).
Dell has long been criticized for its M&A strategy -- or lack thereof -- as its last big acquisition came in 2007 when it acquired storage vendor EqualLogic for $1.4 billion. Dell is also sitting on about $9 billion in cash. So in May, word was out that Dell was putting out its feelers,
interviewing investment bankers and tech industry veterans for its top M&A spot.
Lo and behold, Austin, Texas' Dell grabbed IBM's M&A chief Johnson, who, as it turns out signed a noncompete clause with Armonk, N.Y.-based IBM in 2005.
IBM sued over Johnson's move in late May. IBM said in a statement that Johnson has possession of valuable confidential information and cannot undertake a senior strategy position at Dell without violating his obligations to IBM. As part of the noncompete clause, Johnson would not be able to lure away any other IBM employees for two years, and cannot join a competitor or solicit IBM customers for one year. There are a
few possible outcomes, one of which includes some sort of settlement that would limit Johnson's activities at Dell.
A decision could be made in court this week. One interesting tidbit has come to light. As it turns out, Johnson may have purposely signed the noncompete agreement on
the wrong dotted line, which could nullify the contract.
In the meantime, Dell has hinted at its M&A strategy: It may make a
significant acquisition this summer to expand its data storage and technology services businesses. IBM may also make moves to boost its presence in data centers, where a
turf war is heating up. IBM's last big deal was one that didn't happen. It failed to reach to an agreement to acquire Sun Microsystems Inc. (NASDAQ:JAVA), which was
surprisingly acquired by Oracle Corp. (NASDAQ:ORCL). -
Baz HiralalGo to the Bloomberg storyIBM vs Johnson: The gloves are offDell talks M&A despite sidelined dealmakerIBM vs Johnson: Possible outcomesIBM sues over dealmaker's jump to DellNow hiring: Dell M&A chief
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