With the last obstacle cleared, Hewlett-Packard (HP) is preparing to complete its acquisition of Compaq in the biggest-ever merger in the computer industry, creating a giant in the sector second only to IBM.
The bitter contest over the merger, valued at some $20 billion (€22 billion), appeared to end on Tuesday night when a Delaware court rejected a lawsuit from HP family heir Mr Walter Hewlett contending that the March 19th shareholder vote was tainted.
In a vindication for company management, Delaware Chancery Court Judge William Chandler dismissed all of Mr Hewlett's claims that the vote was tainted by misrepresentations and threats or promises made to a big institutional investor, Deutsche Bank.
Shortly after the ruling, the eldest son of HP co-founder Mr Hewlett threw in the towel and said he would "do everything possible to support the successful implementation of Hewlett-Packard's acquisition of Compaq and encourage others who have shared my views in the past several months to do the same".
Mr Hewlett's decision clears a major obstacle to the merger, which was approved by company shareholders by a narrow margin of 51.4 to 48.6 per cent, based on a preliminary count.
Mr Hewlett, who led a fierce shareholder campaign against the merger, argued that it would tie the company too closely with Compaq's sagging computer manufacturing business.
The consummation of the deal - now expected next Tuesday - is a big victory for HP chief executive Ms Carly Fiorina, who argued the deal would create a high-tech powerhouse capable of going up against the likes of IBM in computers and computer services.
But now Ms Fiorina has to deliver on her promises of successfully integrating the firms - widely seen as a formidable task. "Now we have to make sure that Hewlett-Packard hits its goals and hits its quarterly numbers," said Mr Tom Burnett, president of Merger Insight, a merger advisory firm in New York.
Mr John Challenger, who heads the Chicago consulting firm Challenger, Gray and Christmas, said the most difficult part of the deal still lies ahead. "We are talking about meshing two very disparate corporate cultures," he said recently.
The cutting of as many as 15,000 jobs at the new firm is also expected to create considerable stress, Mr Challenger noted Between them, HP and Compaq employ more than 4,000 people in Ireland.
"For this situation in particular, many of the decisions about which employees stay and which ones go will be based on how well they fit into the dominant or surviving culture," he said.
Mr Hewlett, though he has dropped his opposition to the deal, will also be watching the new company as a major shareholder: he and his Hewlett Trust together control about 5.6 per cent of HP's stock. "I will continue to monitor the company's performance to ensure that it acts in the best interests of all stockholders," he said.
