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Compaq: Plan In Place For HP Merger

If the proposed Hewlett-Packard and Compaq merger is completed, the newly formed company will have a joint product line to announce, said a Compaq official at the World Economic Forum (WEF) held here last week.

The two companies formed a joint operation called a “clean room,” which is comprised of 450 HP and Compaq employees that have been planning how to meld the companies’ various product lines since soon after the merger was announced, said Jim Milton, Compaq’s VP/general manager of North America. An added feature of the clean room is it allows the vast majority of HP and Compaq workers to focus on their jobs and not be distracted by the merger.

Milton described progress by the clean-room workers — all of whom are operating under a very strict non-disclosure agreement — as “pretty far advanced.”

“The day the merger is consummated, we’ll be able to show the new merged product lines,” Milton said.

Milton could not give any details on the merged product line since those involved in the clean room can’t divulge any information unless the merger is successful. This is to prevent either firm from knowing too much about the other if the merger fails and the two companies go their separate ways.

However, nobody in the Compaq camp expects this to happen. CEO Michael Cappellas stated in late January that he expects the deal to be completed. Milton said Cappellas’ confidence level rose further when the merger passed muster with the European Union regulators two weeks ago.

Compaq’s presence at the WEF was pervasive, as the company gave each of the attendees his or her own iPaq handheld computer. These, dubbed the Davos Companion in honor of the usual WEF meeting site, were connected to a wireless LAN in the Waldorf-Astoria allowing the attendees to sign up for seminars and find out information about others at the event. The give-away was such a hit that political and business leaders formed a long line to obtain one and get a few minutes of instruction on its use.

The iPaqs also created the unique image of world leaders huddling together to try and figure out their new gadget.

Outside of the iPaq, Cappellas said technology and the economy were hot topics of conversation. Also attending the WEF were Microsoft’s Bill Gates and HP’s Carly Fiorina.

The main question being asked, Cappellas said, was, “When will the economy recover?”

“Last year our predictions at the WEF were wrong. This year we will be right because we have every possible angle covered,” he said.