INTRODUCTION
The paper will examine the merger of Hewlett-Packard Company (NYSE:HPQ) and Compaq Computer Corporation in 2001. The following key issues will be examined:
-reasons for the merger
-reasons against the merger
-assessment of the performance of the consolidated company since the merger completion.
BACKGROUND OF THE COMPANIES
Hewlett-Packard (HP) is a leading technology solutions provider for both consumers and businesses. “We invent, engineer and deliver technology solutions that drive business value, create social value and improve the lives of our customers” (Hewlett-Packard Company - Company Profile, 2002). Hewlett-Packard was created in 1939 by two Stanford University Graduates, William Hewlett and David Packard. The company had a product line of eight items a resistance – capacity oscillator. In 1998, Hewlett-Packard launched a comprehensive review of its operations. In July, 1999, HP named Carleton (Carly) S. Fiorina as President and CEO. Fiorina was responsible for HP’s reorganization into a company that “makes the internet work for businesses and consumers.” (Hewlett-Packard Company - Company Profile, 2002). HP had positioned itself to deliver Web services, intelligent devices and servers and infrastructure of servers and software.
Compaq Computers built a portable PC in 1980 that met a lukewarm reception. In 1982, HP entered the market with IBM clones – computers that looked and performed like IBM PCs, but with a price point much lower than the IBM
HP entered into an agreement with Compaq Computer Corporation in September 2001. In this definitive agreement, HP is going to purchase all of Compaq’s common shares outstanding, and pay a total price of 0.6325 shares of its common stock for each share of Compaq’s common stock.
Computer technology is constantly advancing over software and hardware that is available at any one given time. These constant changes affect how long computer products can sell for a premium price but also can make it cheaper for those consumers that are not interested in the newest and latest components. Personal computers (PC), also known as desktop computers, are common place in jobs, schools and homes. The demand for personal computers is constant and revolving since components of computers gets better and more powerful with time. The target market then becomes anyone that uses a personal computer for home or work. HP uses the fact that computers are a common item in any office or home to their advantage and offers not only PC’s but other accessories pertaining to computers as well. While HP currently excels at providing a product for a decent price they are missing out on consumers that Equalus will focus
In this chapter, we first provide coverage of expansion through corporate takeovers and an overview of the consolidation process. Then we present the acquisition method of accounting for business combinations followed by limited coverage of the purchase method and pooling of interests provided in a separate sections.
Hewlett Packard is about extending beyond the limits of classical physics and provides a quantum leap in performance, reliability and security. With the ever changing world of technology and the high demand to stay ahead of the curve, HP Labs is inventing today and for the next generation a new line of HP products and solutions. HP focuses on partnering with you, the visionary customer by solving your enterprise issues. HP has the scale, ideas, expertise and unmatched portfolio of products and services to deliver end-to-end innovation and value. We believe diversity is a key driver of our success. Putting all our differences to work across the world is a continuous journey fueled by personal leadership from everyone in our company.
The Macintosh Portable was introduced in 1989 and by design was built to be just as powerful the its desktop version but at a weight of 17 pounds which can’t compare to the MacBookPro that I am writing this paper on right now. After the Macintosh Portable, Apple introduced the PowerBook in 1991. That same year, Apple introduced System 7, which was a major upgrade in the operating system that added color to the interface and added the ability for networking. The operating systems architecture remained the same until 2001.
A merger is a partial or total combination of two separate business firms and forming of a new one. There are predominantly two kinds of mergers: partial and complete. Partial merger usually involves the combination of joint ventures and inter-corporate stock purchases. Complete mergers are results in blending of identities and the creation of a single succeeding firm. (Hicks, 2012, p 491). Mergers in the healthcare sector, particularly horizontal hospital mergers wherein two or more hospitals merge into a single corporation, are increasing both in frequency and importance. (Gaughan, 2002). This paper is an attempt to study the impact of the merger of two competing healthcare organization and will also attempt to propose appropriate
HP, an expert in the hi-tech industry understands the fiercely competitive environment where technological and innovative advancements could create turbulent
AN example, in 2008, Hewlett Packet purchased Electronic Data Systems to enhance the services aspect of the partnering technology offerings (Yurko, 1996). Marketing networks now give companies much wider customer access including overnight services. One such merger is the Takeda Pharmaceutical Inc. Although distribution chains work great to increase the bottom line, these mergers are not well received by federal agencies like the Federal Trade Commission. The concern being monopolization which is when one company controls too much of a given industry. Another driver of mergers is a desire for a leadership change. Sometimes the owner of the high technology firms simply wants to sale out and has problems finding a successor within to take the helm. Hence, a merger holds an
According to experts, IT is labeled as the “root cause” for many merger failures due to lack of integration, failure of due diligence and the inability to facilitate synergies (“IT M&A”, n.d.). With eighty
While Hurd was considered a decent CEO, a scandal emerged consisting of missing funds and legal issues which ultimately resulted in his resignation. HP brought in Leo Apotheker to replace Hurd as CEO. Unfortunately for the company, Apotheker proved to be an incompetent leader who did not know how to succeed in the market and deal with the press. In August 2011, Apotheker decided to utilize a “surprise press release” to announce that HP was planning to spin off from its PC business. As a result of this unexpected announcement, investor confidence plummeted as did HP’s stock price. After less than a year as CEO, HP’s board of directors fired Apotheker. Meg Whitman, the next CEO who previously ran eBay, unfortunately took control of a company which dropped 50% in corporate value. ("Leo Apotheker Dumped as HP CEO.")
FTC employed structural, documentary, statistical, econometrics and financial evidence to verify that the proposed merger of Staples and Office Depot will lead to increase in market concentration, market prices and stock prices, and thus support FTC’s contention that this merger will cause an anticompetitive effect on Office Superstore market. Staples and Office Depot made a plain and useless contradiction. Finally, the Court announced to agree with FTC, and granted a preliminary injunction on this merger. This paper mainly focuses on FTC’s evidence and analysis.
HP is one of the few companies in the world to successfully marry the technologies of measurement, computing and communication. The company makes new advances in portable computing, enters the home-computing market and continues to invent new printing and imaging solutions. For most of the decade, HP enjoys growth rates of 20 percent.
Over the past five years, IBM has quietly transformed itself into a "software, solution and services" company. With the transformation from a hardware vendor to a solution provider, it has entered the area of consulting services.
Compaq and Dell stole IBM’s PC market with the right price and the right message.
Page eight of the case begins to outline some of the challenges that the HP-Cisco alliance had already faced concerning the sale of joint products. For example, we learn that at HP, Cisco products did not count towards a sales representative’s quota and this resulted in a decline in sales of Cisco equipment by HP sales representatives. Further, if HP or Cisco sales staff had to master not only their parent company product line,