HP Buys Compaq 759
MaxVlast was the first to report: "The New York Times is reporting that HP is buying Compaq to form the second-largest computer company (after IBM). Wow."
"The one charm of marriage is that it makes a life of deception a neccessity." - Oscar Wilde
More layoffs expected (Score:5, Informative)
And this is after HP laid of 6,000 people in July.
Why link to NY times when you have Yahoo? (Score:2, Informative)
Check the above link to read about this merger...
Pardon my excitement, but (Score:5, Informative)
The most immediate impact I predict is in PC sales. I've always had the impression that Compaq did much better in this market than HP, and ignoring the fact that all Compaq PCs now are HP PCs ;-), there's now one less choice for Joe Average Consumer. I haven't been to a non-online computer reseller in years, but IIRC places like CompUSA had very few brands -- Compaq, HP, Toshiba, and maybe some Macs. Dell and IBM only sell direct, right?
I only hope that HP is nicer to Compaq than Compaq was to DEC. :-0
Re:Implications for alpha? (Score:3, Informative)
Mergers of this magnitude take a long time to gestate, so I think it is safe to say that Compaq jettisoned Alpha as a condition of the merger.
No need to POST the article.... (Score:5, Informative)
http://archives.nytimes.com/2001/09/04/business/04 DEAL.html [nytimes.com]
Yeah, I know, Taco won't change'em so NYT won't bust his chops, but they're gonna bust us all bigtime if we keep swiping their articles straight up... Just right-click, copy link location, paste into new window, make the appropriate edit, and fsck'em. After all, it's not like you were gonna feed'em real marketing data anyway.... right?
--
You need a Linux guru. [speakeasy.net]
Re:Ravages of the new economy (Score:3, Informative)
Yup, it's consolidation in a stagnant market, although it doesn't nessararily look horrible.
HP gets:
1) Strong x86 server presence.
2) Very large PC customer list (although I doubt there's much money there)
3) Digital's consulting group
4) VMS, which will probably avoid death for another 10 years
Which fills the gaps HP is missing as 2nd tier x86 provider (behind IBM and Dell) without much of a NT consulting division to speak of. When Itanium gets up to speed, they'll be in position to offer almost complete end-to-end services, which is complete crucial because corporations tend to ousource like crazy during a recession.
The only question is which UNIX gets a bullet in the head. My guess is Tru64.
Now -this- is the stuff of nightmares. (Score:2, Informative)
Re:Good or bad... - in all seriousness (Score:3, Informative)
--CTH
Dark Days are approaching (Score:5, Informative)
copy of the article...from The New York Times (Score:1, Informative)
Hewlett-Packard to Acquire Compaq in $25 Billion Deal
By ANDREW ROSS SORKIN and FLOYD NORRIS
Hewlett-Packard will announce today that it is acquiring Compaq Computer for $25 billion in stock in a bold move to grow as the computer business struggles with shrinking sales, executives close to the negotiations said last night.
The merger, if completed, would produce a company with total revenue only slightly less than those of I.B.M., the largest computer company. But both Hewlett-Packard and Compaq have recently seen revenues slide and profits plunge because of a computer industry slowdown, and both have announced job cuts.
For Carleton S. Fiorina, who became chief executive of Hewlett- Packard in 1999 when she was hired away from Lucent Technologies, the acquisition amounts to a renewed bet on the computer business and particularly a new operating system for computer servers that was developed by Intel and Hewlett-Packard. Compaq is the other large company that has announced it plans to use that technology, which will compete with technologies developed by Sun Microsystems and I.B.M.
Late last year, Hewlett-Packard had tried to move in a different direction that emphasized services by acquiring the consulting operations of PricewaterhouseCoopers, the large accounting firm. But that plan fell apart as Hewlett's stock price declined.
Compaq, which is based in Houston, began in 1982 as a maker of personal computers. It became a phenomenal success in its first 15 years but has stumbled more recently amid severe price wars in personal computers. Its 1998 acquisition of Digital Equipment, itself once the second-largest computer maker, has not been viewed as a great success.
Investors in both Compaq and Hewlett-Packard have suffered in the current decline in technology stocks, although Compaq's woes have taken a greater toll. That stock is down 76 percent from its peak, reached in early 1999, while Hewlett- Packard is off 66 percent from its peak, reached last summer.
While the executives involved in the talks said that an agreement had been reached that provided for Hewlett-Packard to acquire Compaq, exact terms of the offer were not disclosed. They said, however, that a premium is being offered for Compaq's stock, which closed Friday at $12.35, down 34 cents, while Hewlett- Packard shares fell 19 cents to $23.21.
The executives said that Ms. Fiorina would become chairman and chief executive of the combined company, which will be based in Hewlett- Packard's home town of Palo Alto, Calif., while Michael D. Capellas, Compaq's chairman and chief executive, will become president.
Spokesmen for both companies declined to comment last night.
When announced job reductions, of 8,500 jobs at Compaq and 9,000 at Hewlett-Packard, are completed, employment at the companies will be about 62,800 at Compaq and 87,000 at Hewlett-Packard. Further reductions seem likely, as executives said that they expect annual cost savings of $2.5 billion within several years.
In its most recent 12 months, Hewlett-Packard reported revenues of $47 billion, while Compaq had revenues of $40 billion. The combined $87 billion is close to the $90 billion reported by I.B.M., and far above the $33 billion for Dell Computer, which now ranks fourth and would move to third if the merger is completed.
In its most recent financial report, for the nine months through July, Hewlett-Packard said its revenues were down 5 percent from the comparable period a year earlier, to $33.7 billion. But its net income fell 82 percent to $506 million. Compaq, reporting on the six months through June, said revenues fell 13 percent to $14.2 billion. It suffered a net loss of $201 million for the period, compared with a profit of $684 million in the same period of 2000.
Compaq had hoped that Digital Equipment technology would provide it with a competitive edge in new generations of computer servers. But it recently chose to not use that technology and instead go with the technology developed by Hewlett-Packard and Intel.
Both Hewlett-Packard and Compaq have been hurt by price wars in personal computers, where it has been difficult for makers to differentiate themselves when all except Apple Computer are offering operating systems from Microsoft.
Many in the industry hope that the trend toward decentralized computing, in which great computing power migrated to desktops in homes and offices, will reverse itself as a new Internet-based system uses racks and racks of powerful computers known as servers whose computing power will be called on by computers and cellular phones around the world. If that vision is realized, then a major battle looms over which maker of servers is able to gain a dominant position.
It fell flat on it's ass, but not because of M$ (Score:2, Informative)
Hence the formation of EISA and the collapse of MCA. Open Sourcing (so to speek) MCA resulted in PCI (not completely, but a good chunk of the PCI spec is MCA type stuff)
Re:they say cut back, we say FIGHT BACK! (Score:2, Informative)
Yes, HP's Test and Measurement division was one of the groups spun-off to Agilent [agilent.com] back in November '99.
--bal
Official HP press release (Score:2, Informative)
Analyst suggested this in January and got flamed. (Score:2, Informative)
Analyst predicts PC vendors must consolidate or die
By Larry Barrett
Staff Writer, CNET News.com
January 16, 2001, 6:10 p.m. PT
Bear Stearns PC analyst Andrew Neff after the bell Tuesday fired off what he called a "manifesto," recommending massive and immediate consolidation of the major U.S. PC vendors. Some of his contemporaries strongly disagreed.
After watching profit warning after profit warning from major PC makers in recent weeks, Neff said the industry is at a "critical stage." The PC sector will unravel because of overcapacity, a problem that has plagued other industries. PC stocks will continue to erode unless companies take "concrete steps towards consolidation."
Among Neff's suggestions:
Compaq should sell out to HP.
Re:It fell flat on it's ass, but not because of M$ (Score:1, Informative)
Re:A Hardware monopoly? (Score:1, Informative)
Re:It fell flat on it's ass, but not because of M$ (Score:1, Informative)
Other Press Releases (Score:2, Informative)
and HP's http://www.hp.com/hpinfo/newsroom/press/04sep01a.
Pretty Tired but i think they are the same article... they already are merging hmmm.
Another note one the main HP page there is a big pic of Tux and a Sentance HP Linux Evangalists... something or another
also covered in cnet (Score:2, Informative)