by Luciano U. Werner » Sep 4, 2001 @ 9:11am
And here's how it came out on The New York Times:<br><br>September 4, 2001 <br><br>Hewlett-Packard to Acquire Compaq in $25 Billion Deal <br><br>By ANDREW ROSS SORKIN and FLOYD NORRIS <br>The Associated Press <br>Hewlett's chairwoman and president is Carleton S. Fiorina. <br>Hewlett-Packard to Cut 6,000 Jobs (July 27, 2001) <br>Compaq's Revenue and Income Fall (July 26, 2001) <br>Hewlett Profit Falls but Beats Expectations (August 17, 2001) <br>Compaq to Emphasize Computer Services (July 17, 2001) <br>Market Place: Compaq Announces More Layoffs (July 11, 2001) <br>Join a Discussion on Mergers and Acquisitions <br><br><br><br>Get Stock Quotes <br>Look Up Symbols <br> <br>Portfolio | Company Research <br>U.S. Markets | Int. Markets <br>Mutual Funds | Bank Rates <br>Commodities & Currencies <br>Compaq <br>Hewlett-Packard is said to be close to acquiring Compaq Computer for $25 billion in stock. Michael Capellas is Compaq's president and chief executive. <br>------------------------------------------------------------------------ <br><br>Hewlett-Packard will announce on Tuesday that it is acquiring Compaq Computer for $25 billion in stock in a bold move to grow as the computer business struggles with shrinking sales, executives close to the negotiations said Monday night. <br><br>The merger, if completed, would produce a company with total revenue only slightly less than those of I.B.M., the largest computer company. But both Hewlett-Packard and Compaq have recently seen revenues slide and profits plunge because of a computer industry slowdown, and both have announced job cuts. <br><br>For Carleton S. Fiorina, who became chief executive of Hewlett- Packard in 1999 when she was hired away from Lucent Technologies, the acquisition amounts to a renewed bet on the computer business and particularly a new operating system for computer servers that was developed by Intel and Hewlett-Packard. Compaq is the other large company that has announced it plans to use that technology, which will compete with technologies developed by Sun Microsystems and I.B.M. <br><br>Late last year, Hewlett-Packard had tried to move in a different direction that emphasized services by acquiring the consulting operations of PricewaterhouseCoopers, the large accounting firm. But that plan fell apart as Hewlett's stock price declined. <br><br>Compaq, which is based in Houston, began in 1982 as a maker of personal computers. It became a phenomenal success in its first 15 years but has stumbled more recently amid severe price wars in personal computers. Its 1998 acquisition of Digital Equipment, itself once the second-largest computer maker, has not been viewed as a great success. <br><br>Investors in both Compaq and Hewlett-Packard have suffered in the current decline in technology stocks, although Compaq's woes have taken a greater toll. That stock is down 76 percent from its peak, reached in early 1999, while Hewlett- Packard is off 66 percent from its peak, reached last summer. <br><br>While the executives involved in the talks said that an agreement had been reached that provided for Hewlett-Packard to acquire Compaq, exact terms of the offer were not disclosed. They said, however, that a premium is being offered for Compaq's stock, which closed Friday at $12.35, down 34 cents, while Hewlett- Packard shares fell 19 cents to $23.21. <br><br>The executives said that Ms. Fiorina would become chairman and chief executive of the combined company, which will be based in Hewlett- Packard's home town of Palo Alto, Calif., while Michael D. Capellas, Compaq's chairman and chief executive, will become president. <br><br>Spokesmen for both companies declined to comment last night. <br><br>When announced job reductions, of 8,500 jobs at Compaq and 9,000 at Hewlett-Packard, are completed, employment at the companies will be about 62,800 at Compaq and 87,000 at Hewlett-Packard. Further reductions seem likely, as executives said that they expect annual cost savings of $2.5 billion within several years. <br><br>In its most recent 12 months, Hewlett-Packard reported revenues of $47 billion, while Compaq had revenues of $40 billion. The combined $87 billion is close to the $90 billion reported by I.B.M., and far above the $33 billion for Dell Computer, which now ranks fourth and would move to third if the merger is completed. <br><br>In its most recent financial report, for the nine months through July, Hewlett-Packard said its revenues were down 5 percent from the comparable period a year earlier, to $33.7 billion. But its net income fell 82 percent to $506 million. Compaq, reporting on the six months through June, said revenues fell 13 percent to $14.2 billion. It suffered a net loss of $201 million for the period, compared with a profit of $684 million in the same period of 2000. <br><br><br>Compaq had hoped that Digital Equipment technology would provide it with a competitive edge in new generations of computer servers. But it recently chose to not use that technology and instead go with the technology developed by Hewlett-Packard and Intel. <br><br><br>Both Hewlett-Packard and Compaq have been hurt by price wars in personal computers, where it has been difficult for makers to differentiate themselves when all except Apple Computer are offering operating systems from Microsoft. <br><br><br>Many in the industry hope that the trend toward decentralized computing, in which great computing power migrated to desktops in homes and offices, will reverse itself as a new Internet-based system uses racks and racks of powerful computers known as servers whose computing power will be called on by computers and cellular phones around the world. If that vision is realized, then a major battle looms over which maker of servers is able to gain a dominant position
Celerius quam asparagi cocuntur
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DocSMRF
Tactical Advisor
HP buying Compaq?
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<br>cant wait for information on the new ipaq though
