HP Ready to Roll Out New Company

 
 
By eweek  |  Posted 2002-05-02 Email Print this article Print
 
 
 
 
 
 
 

HP executives will roll out next week a new and much bigger company that includes all the assets and liabilities of Compaq and will begin releasing product road maps for the next three years.

With the bitter six-month proxy battle behind them, Hewlett-Packard Co. executives are ready to roll out a new and much bigger company next week that includes all the assets and liabilities of Compaq Computer Corp. The Palo Alto, Calif., company on Friday will complete its long disputed $19 billion buyout of Houston-based Compaq after winning a court battle and gaining the official tally from the March 19 shareholder vote.
Starting Monday, HP executives will release product road maps for the next three years to its top 100 corporate customers, outlining which products will live and die under what the company calls "the new HP," and plan to deliver the information to all enterprise customers within 30 days, said an HP spokeswoman.
That will come as welcome news to those HP and Compaq customers who have been waiting for the battle to play out to find out what will happen to their products. And though HPs struggle with family heir Walter Hewlett was a very public one, several said it will have little impact on their decisions whether to stay with the combined company or go elsewhere. "Those things wouldnt affect me one way or another," said Dave Howell, manager of IS at PED Manufacturing Ltd., in Oregon City, Ore. "It all comes down to price and service. Otherwise, I see no reason not to buy from them." Also on Monday HP will start trading shares on the New York Stock Exchange under the new trading symbol HPQ. Its current symbol is HWP. HP expects that the trading of Compaq stock will be suspended before the market opens on Monday.
The acquisition, first announced in September, was finally allowed to proceed Tuesday after Delaware Chancery Court Judge William Chandler III dismissed Hewletts lawsuit alleging HP misled and pressured shareholders to support the deal in a March 19 vote. Hewlett, whose fight that ultimately cost him his seat on the companys board, conceded defeat shortly after the ruling in the court case, which was highlighted last week by a tense 7-hour grilling of HP Chairman and CEO Carly Fiorina by Hewletts attorney, Stephen Neal. On Wednesday, IVS Associates Inc., of Newark, Del., officially declared that HP shareholders had approved the deal by a slim 51.4-to-48.6 percent margin out of 1.63 billion shares cast. While two federal agencies still have ongoing inquiries into HPs proxy fight, legal experts said its likely theyll reach the same conclusion as the Delaware judge and take no action against the company. Having succeeded in pulling off one of the most costly deals in industry history, Fiorina now must make good on her vow to have the merged company "hit the ground running on day one," the kind of quick decision-making that will help ease customers and business partners concerns following months of uncertainty. "The key to success for the new organization will be clear communications, first to the employees of the joint firm, and also to their channel partners who will be assigned to the various functional areas, sales and channels organizations," said John Sheaffer, CEO of the Sysix Cos., a high-tech solutions provider in Westmont, Ill., that resells HP products. HP made much of its product plans clear in discussing the buyout, basically keeping the strongest brands in each companys inventory. Of the largest product lines, HP is expected to keep its Unix-based servers and its market-leading imaging and printing business as well as its consumer PC line. Compaq products expected to survive are the high-end Himalaya NonStop servers, used by many of the worlds largest stock markets, its Intel-based ProLiant servers, currently the top-selling worldwide, and its commercial PC business. While Compaq customers will undoubtedly be most impacted by the deal, which essentially marks the demise of their vendor, several expressed confidence that their computing needs will continue to be met, giving little weight to criticisms aired during the months-long debate about the deal. "I cant say the battle has been terribly important to me," said David Brinker, chief information officer for CSE Insurance Group in Walnut Creek, Calif., which relies heavily on Compaq equipment. "I think in the long run the merger will create a better company." Related stories:
  • HP, Compaq Deal Approved, IVS Says
  • HP Appoints 1,000 Managers
  • Special Report: HP Courts Compaq
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