Case | HBS Case Collection | April 2004 (Revised September 2004)

Hewlett-Packard-Compaq: The Merger Decision

by Krishna G. Palepu and Jonathan Barnett

Abstract

Hewlett-Packard's proposed $24 billion acquisition of rival Compaq marked the largest merger in the history of the computer industry. The merger was Hewlett-Packard's response to sweeping changes impacting the technology industry. The severity of the stock market's reaction to the deal's announcement, coupled with a "slim but sufficient" 51.4% shareholder approval margin, left many wondering whether the deal was beneficial for shareholders.

Keywords: Cost vs Benefits; Mergers and Acquisitions; Business and Shareholder Relations; Computer Industry; Technology Industry;

Citation:

Palepu, Krishna G., and Jonathan Barnett. "Hewlett-Packard-Compaq: The Merger Decision." Harvard Business School Case 104-048, April 2004. (Revised September 2004.)