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After more than seven months of contentious debate and high-profile court battle, Hewlett-Packard Co. on Friday announced that it has completed its $19 billion buyout of longtime rival Compaq Computer Corp.
Together, the companies have more than 150,000 employees, operate in more than 160 countries and have annual revenues of more than $80 billion, making the “new HP” second in size to IBM.
The new company immediately becomes the worlds leading seller of personal computers, Intel-based servers and storage devices, and number three in IT services and management software. The deal also boosts HPs position as the number two vendor worldwide of Unix-based servers.
While HP will begin trading under the new symbol HPQ on the New York Stock Exchange on Monday, the company plans to officially launch the new enterprise at a Tuesday morning news conference.
HP Chairman and CEO Carly Fiorina and Michael Capellas, Compaqs former chairman and chief executive who will serve as HPs president and chief operating officer, will host the ceremony in Cupertino, Calif., a short distance away from HPs headquarters in Palo Alto, Calif.
The closing of the deal on Friday came eight months after the massive merger of two of the worlds top computer makers was first announced and followed a hotly contested stockholder fight that pitted the company against HP heir Walter Hewlett.
The son of late HP co-founder William Hewlett denounced the deal, contending the high-risk strategy would cost the already struggling company billions of dollars in integration costs, increase its exposure to a slumping PC market, and undermine the companys market leading printer and imaging business.
The buyout of Houston-based Compaq appeared to be doomed in December when the Packard family announced that it, too, would vote their shares against the deal. Together, the Hewletts and Packards controlled about 17 percent of HPs stock, and were widely seen as having enough influence to get more than 50 percent of company shares to oppose the buyout, essentially killing the deal.
But Fiorina and senior HP executives, such as 32-year veteran Bob Wayman, HPs chief financial officer and a member of the board, launched an aggressive lobbying campaign to convince investors the deal presented the best opportunity to strengthen the company and assure future growth.
After months of battling Hewlett, the deal wrapped up quickly this week, with a Delaware Chancery Court judge ruling against Hewlett in a lawsuit in which he accused HP of misleading and strongarming shareholders into supporting the deal, and a day later with IVS Associates Inc. declared that HP shareholders narrowly approved the acquisition during a March 19 vote.