It's official: HP to buy Compaq

A press release just posted on the Hewlett-Packard Web site has confirmed earlier press reports stating the company has entered into a $47.5 billion (US$25 billion) agreement to acquire rival IT vendor Compaq.

According to the release, the merger will create a "US$87 billion global technology leader". This puts the merged company on par with IBM in terms of yearly turnover. For the 12 months ending December 31, 2001 IBM's revenue totalled US$88 billion.

By combining forces, HP will place itself in the box seat in all major IT markets including servers, PCs, handhelds, imaging and printing. It will also bolster its claim as a serious player in management software, IT services, and storage.

"At a particularly challenging time for the IT industry, this combination vaults us into a leadership role with customers and partners," said Carly Fiorina, chairperson and chief executive officer of HP, who will maintain her current position in the new company.

Compaq CEO Michael Capellas, who will become president of HP under the merger proposal, said: "We are creating a new kind of industry leader. In sharp contrast to our competitors, we are committed to leading the industry to open, market-unifying architectures and interoperability, which reduce complexity and cost for our customers," he said.

Under the terms of the agreement, HP shareholders will own approximately 64 per cent and Compaq shareholders 36 per cent of the merged company. The merged company expects to save US$2.5 billion annually and drive a significantly improved cost structure. Annual revenues of US$87.4 billion and annual operating earnings of US$3.9 billion are expected. It will employ over 145,000 employees.

News of the merger broke earlier today when the New York Times reported that HP would formally announce on Tuesday (in the US) its plan for acquiring Compaq.

A spokesperson for HP Australia said no comment was currently available and they expected no comment would be forthcoming from HP Australia for a couple of days.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Howard Dahdah

Show Comments

Cool Tech

Breitling Superocean Heritage Chronographe 44

Learn more >

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?