BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh
BBCi CATEGORIES   TV   RADIO   COMMUNICATE   WHERE I LIVE   INDEX    SEARCH 

BBC NEWS
 You are in:  Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 


Commonwealth Games 2002

BBC Sport

BBC Weather

SERVICES 
Friday, 3 May, 2002, 21:50 GMT 22:50 UK
HP boss emerges victorious
Walter Hewlett leaves the court
Walter Hewlett now says he will support the merger
Rebel Hewlett Packard shareholder Walter Hewlett has given up his fight to block a hi-tech merger between HP and Compaq after losing a court case.

Mr Hewlett's decision clears the way for the launch of the new combined company on 7 May.

Hewlett-Packard
Founded: 1938
Employees: 86,200
2001 Revenues: $45.2bn
2001 profits: $408m
CEO: Carly Fiorina
The merger - originally proposed in June 2001 - prompted a bitter battle and the shareholder vote was only won by a wafer-thin margin.

Mr Hewlett, heir to one of HP's founders, led the opposition to the deal, culminating in allegations that HP boss Carly Fiorina had bought off shareholders.

The Delaware Chancery Court on Tuesday rejected these claims, and Mr Hewlett said he would not appeal.

In a statement, the rebel said he would "now do everything possible to support the successful implementation of HP's acquisition of Compaq".

Distractions

The court also dismissed allegations that HP executives misled investors by exaggerating the financial benefits of buying up Compaq.

Compaq
Founded: 1983
Employees: 63,700
2001 Revenues: $33.5bn
2001 loss: $785m
CEO: Michael Capellas
The $18bn merger between the two companies will be the hardware sector's biggest ever tie-up.

Many HP shareholders opposed the deal because they thought it would distract from day-to-day operations at a time when computer makers worldwide were struggling to win new orders.

There were concerns also that HP was being asked to pay over the odds for Compaq.

Mr Hewlett had claimed that Ms Fiorina coerced Deutsche Bank, a major shareholder, into backing the merger by threatening to withhold future investment banking business.

Close-run

A preliminary count of the HP shareholder meeting on 19 March showed a narrow majority of 51.4% in favour of the deal.

Compaq shareholders, in contrast, voted in favour of the deal by a wide majority.

HP executives have said they are confident that that the final tally will carry the merger.

Ms Fiorina is one of the most powerful women in US business and she has bet her career on the merger's success.

"I think the company's success will by my legacy," she said in October. "The company's failure will be my failure, with all the predictable consequences of that."

HP shares closed 24 cents lower at $16.86 on Wednesday, while Compaq rose 50 cents to $10.65.

 WATCH/LISTEN
 ON THIS STORY
Jeff Christian, director, Christian and Timber
"The company has not performed as well as it could have, but the board is patient because many of the woes Fiorina inherited."
Andrew Ross Sorkin, New York Times
"There was no smoking gun, there were overtones but technically there was not enough to substantiate the claim."
The BBC's Angela Garvey
"A deal that would rank as the largest merger ever in the technology industry"
See also:

18 Mar 02 | Business
HP and Compaq set for final showdown
20 Mar 02 | Business
Shareholders hail 'historic' vote
05 Sep 01 | Business
Jobs slashed in biggest PC merger
06 Sep 01 | Business
Tough sell for PC giants merger
04 Sep 01 | Business
Profile: HP's Carly Fiorina
02 Apr 02 | Business
Lawsuit disputes HP-Compaq merger
08 Apr 02 | Business
Next hurdle for HP-Compaq merger
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories