SCHLUMBERGER <SLB> ENDS PACT TO SELL FAIRCHILD
Schlumberger Ltd said it terminated an
agreement in principle for Fujitsu Ltd to buy 80 pct of its
Fairchild Semiconductor operations.
    The company said the rising political controversy in the
U.S. concerning the venture made it unlikely that the sale of
the Fairchild stake could be completed within a reasonable
time.
    The sale has been opposed by the U.S. Commerce Department
and the U.S. Defense Department, in part on national security
grounds.
    The company said termination of the agreement opened other
possibilities, including a possible leveraged buyout of the
semiconductor maker by Fairchild management.
    In the interim, Fairchild would continue its ongoing
business within Schlumberger, the oilfield services concern
said.
    Last October, Schlumberger announced the sale of the
Fairchild stake and said it would take a 200 mln dlrs charge in
the fourth quarter from the sale. The company ended up
recording special charges of 2.1 billion dlrs in the fourth
quarter, leading to a loss of 2.02 billion dlrs for the year.
    Schlumberger never announced a price for the sale, but
industry analysts have estimated the value of the deal at about
200 mln dlrs.
    The proposed sale was under antitrust review by the U.S.
Justice Department. Additionally, Commerce Secretary Malcolm
Baldridge and other U.S. officials have voiced reservations
about the transaction since it was announced.
    Government officials have expressed concern that the sale
could reduce the competitiveness of U.S. chip makers by putting
key advanced technology into Japanese hands.
    New, high-technology semiconductors are used in
supercomputers, which are faster and more powerful than
existing computers.
    Schlumberger is an oilfield services company controlled by
French interests and headquartered in New York. Fujitsu Ltd is
a computer and telecommunications company based in Japan.
 Reuter
