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HP, Compaq Merger OK'd

5/01/2002 08:12:00 AM Eastern

Wilmington, Del. - The proposed Hewlett-Packard and Compaq merger cleared its final hurdle yesterday receiving the go ahead necessary to merge from a Delaware Chancery Court Judge.

After the ruling from Judge William Chandler, Walter Hewlett, a board member and son of the company co-founder who had fought against the merger, conceded defeat.

This case was Hewlett's last chance to block the merger. In March shareholders from the companies voted in favor of the merger, but Hewlett complained of irregularities in HP's voting procedure, including how HP solicited votes for the merger from large institutional investors like Deutsche Bank.

The merger is expected to be finalized on May 7 when Compaq officially will come under the HP umbrella. The newly formed company is expected to undergo a series of growing pains that will include about 15,000 layoffs, according to a Reuters' report. The two companies have been developing an integration plan through a jointly staffed committee created shortly after the merger was announced last September. Because of this preliminary work the actual merging of the corporations various components and product lines is expected move along swiftly.