NEC to acquire 60 percent stake in SGI Japan

NEC announced Friday that it and a subsidiary, NEC Soft Ltd., will each acquire stakes in SGI Japan Ltd., the local unit of Silicon Graphics Inc. (SGI), to give the NEC group a 60-percent stake in the company.

The combined investment by NEC will total around 11.5 billion yen (US$93.7 million) and follows the signing last month of a strategic alliance between the two companies that called on NEC to make an investment in SGI Japan. As a result of the deal, SGI Japan will acquire rights to some Japanese trademarks and the right to license some SGI trademarks and intellectual property related to its business, NEC said in a statement.

The deal makes NEC, along with the U.S. parent SGI, the joint largest shareholders in the venture with a 40 percent stake each. NEC Soft will hold the remaining 20 percent stake although the division of shares could change later this year if SGI Japan goes ahead with plans to list its shares on a local stock market.

NEC and SGI began working together in 1998 when they agreed to sell each other's supercomputing products in Japan. The work was expanded with the alliance announcement in September under which the two companies agreed to work more closely to expand sales of their high-performance, high-reliability computer systems, particularly into the broadband Internet infrastructure market. NEC Soft also outlined plans to work with SGI in the fields of genome research and biotechnology.

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