Hewlett-Packard (HP) and Compaq
Introduction:
The acquisition of Compaq by Hewlett-Packard was characterized by a variety of features and events that made the merger exceptionally interesting. HP bought Compaq in September 2002, by a $18 billion stock-swap, resulting in the largest take-over in the computing industry. HP's acquisition created an IT giant with annual sales of about $87 billion and current assets of over $55 billion, which changed the competitive landscape for the whole IT industry. However, the matter of great interest lies in the fact that this take-over was extremely controversial. The heirs of the founders of HP pledged their entire stock of 18 percent against the merger saying that it was not the "hp way". The "hp way", they claimed, "embraces a love of technology, a bond with the community, and deep respect for employees". The merger, it was believed, would cause 15,000 lay-offs, which the heirs believed, was against HP's corporate culture. Other significant issues were raised and the merger had to pass through competition authorities in the US and the EU. Furthermore, HP's CEO Carly Fiorina was accused of bribing an investor, Deutsche Asset Management, a unit of Deutsche Bank, into voting for the deal. However, despite all there hurdles, the deal was finally closed on 4th September 2002, for $ 18 billion.
Company Description:
The following section briefly describes the two companies, HP and Compaq.
Hewlett-Packard (HP):
The Hewlett-Packard Company is the world's largest information technology company, in terms of revenue. It is headquartered in Palo Alto, California and is renowned globally for it's good quality computing, printing, digital imaging, software and services. HP is recognized as ...