HP, Compaq set dates for merger vote

Hewlett-Packard and Compaq have named the dates for their shareholders to vote on the proposed merger
Written by Matt Loney, Contributor

Hewlett-Packard and Compaq shareholders will vote on the proposed merger of their companies next month. Hewlett-Packard has set a date of Tuesday 19 March for its shareholders to vote and Compaq has chosen Wednesday 20 March.

Compaq said it plans to mail a prospectus to its shareholders on Wednesday.

The announcement comes just days after the European Commission decided to allow the merger to go ahead. The European regulator said it decided not to obstruct the merger after determining that the deal would not significantly harm competitors or consumers.

However, the US has yet to give its stamp of approval -- Compaq has said it expects a decision from the United States and other countries, such as Australia, by the end of February.

The two companies announced their intention to merge in September. Wall Street and industry analysts largely frowned on the deal in the first days and weeks after the announcement, and more recently some of the fiercest opposition has come from the children of HP's founders, who are influential shareholders. Lately, however, the companies have said that some large institutional shareholders are showing signs of warming to the merger.

Walter Hewlett, a dissident HP board member and shareholder and son of co-founder William Hewlett, is waging a battle to get shareholders to vote against the deal, saying it would give the company a greater presence in the low-margin PC business, while diluting its highly profitable printing and imaging operations.

If the merger gets shareholder approval the company will become a European titan, controlling more than twice the market share of its nearest European rival, according to industry analysts.

It would account for about 21 percent of the PC market for Europe, the Middle East and Africa (EMEA), with quarterly shipments of about 1.8 million units, according to recent figures from Gartner Dataquest. The new HP would be No. 1 by far in the EMEA region, with Dell Computer as its nearest competitor with a 9 percent share of the market, as of the second quarter of this year. Fujitsu-Siemens would rise into third place with a 7.3 percent share and shipments of 609,000 units for the quarter. IBM would be fourth largest, with 6.6 percent of the market and quarterly shipments of 552,000.

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