HP AND COMPAQ MERGER

Hp and Compaq Merger



Hp and Compaq Merger

Introduction

There is no more spectacular or contentious activity in corporate investment than the acquisition of one firm by another or the amalgamation of two firms. It is the stuff of which reporter's dreams are made, and it is also an embarrassing source of scandal.(Ross, 1996) A merger refers to the absorption of one firm by another. The obtaining firm keeps its title and its identity, and it comes by all of the assets and liabilities of the came by firm. After a merger, the came by firm ceases to live as a separate enterprise entity. In resent years, more and more amalgamation and acquisition happened for those big businesses as a result of strong competition in the enterprise world. To sustain the comparable position in their respective commerce, merger and acquisition become suitable strategic alternate, which would convey synergy to both companies. Revenue enhancement, cost decrease, lower levies, and lower cost of capital can be the basic classes of possible causes of synergy.

The merger of Compaq and HP businesses is a resent case, which brings controversial discussion in the public media. Cpellas contacted with investors last drop to sell their controversial amalgamation, numerous remarks present distinct attitudes on this event. In this case study, it will aim on the pre-merger of HP and Compaq. By looking insight of the entire process of the merger, the motivation of the amalgamation will be identified, as well as its anticipated synergy resulting from merger. Important analysis will be of whether the anticipated consequences of the amalgamation were a sensible cornerstone for going ahead with it at the time of the amalgamation and the challenge opposite the merger.

Premium Paid To The Target

In September of 2001, Hewlett-Packard company and Compaq broadcast plans to amalgamate, creating $87 billion international technology foremost and resumed supply repurchase program. In November, Compaq broadcasts grid computing program and smashed into peak 10 on Interactive Week's Interactive 500. In stride of 2002, government Trade charge clears suggested HP-Compaq amalgamater. Compaq shareholders accept HP-Compaq merger. Compaq Computer company becomes part of Hewlett-Packard Company on May 3, 2002, as amalgamation is lawfully closed. HPQ is revealed as new supply ticker for blended company. New HP is formally commenced on May 7, 2002. The acquisition of Compaq Computer in a supply transaction valued at roughly $19 billion. (www.hp.com)

HP and Compaq formally amalgamate, beginning operations as one company. The new HP serves more than one billion customers across 162 nations, with an employee of 150,000. The blended company brags advanced market share over a number of hardware lines, encompassing UNIX and Windows-based servers, individual computers and enterprise storage. HP furthers its scheme to be the leading provider of access apparatus, submissions consigned as world wide web services. It is running on infrastructure solutions as market authority in enterprise storage, UNIX, Windows, and Linux servers, management programs, PCs, imaging and publishing apparatus and IT services. The new HP will offer the industry's most complete set of IT ...