iPhone 14 Pro vs. Galaxy S22 Ultra HP Pavilion Plus Planet Crossword Pixel Watch Apple Watch Ultra AirPods Pro 2 iPhone 14 Pro Camera Best Android Phones
Want CNET to notify you of price drops and the latest stories?
No, thank you

Year in review: A merger mess

One of the biggest mergers in technology history is on unstable ground, as shareholders balk and family ties weigh heavy. Here's how the deal was done--and how it may eventually come apart.


A merger mess
Can Hewlett-Packard close its Compaq buyout?

Many people spent Labor Day deciding when to put the next burger on the grill.

The chiefs of Hewlett-Packard and Compaq Computer chose that holiday to light a fire under the PC industry by announcing a $25 billion megamerger.

Analysts and rival executives panned the deal, saying it would increase HP's exposure to the oft-unprofitable PC market but not solve many of the company's inherent problems. And integrating the pair seemed as difficult as squeezing a hot dog and hamburger into one bun.

With time, some foes turned into fans--partly because of a publicity blitz by HP CEO Carly Fiorina and others. The company's earnings satisfied investors. Compaq, meanwhile, touted a string of large contract wins with, among others, General Motors.

But the founding families had other plans. With HP heirs and other family foundations controlling close to 18 percent of the company's stock, approval of the merger could hinge on what is shaping up to be a close playoff by proxy early next year.

Click here to Play
 HP, Compaq talk merger strategies
Carly Fiorina, CEO, Hewlett-Packard, and Michael Capellas, CEO, Compaq
September 4, 2001

The $25 billion gamble
The reaction to the Compaq buyout, which aims to combine two of the PC industry's giants, was immediate: Will this work? Can they pull it off?
September 5, 2001
Easing into the union
Although the deal may have surprised industry experts, HP says it had been eyeing Compaq since 1999.
November 15, 2001
Could the new HP take on Dell?
The merger would bring HP new storage and service units--and potentially make it the world's largest PC maker. Unfortunately, it wouldn't be the world's most efficient.
September 4, 2001
Deal starts a family feud
Walter Hewlett, who has always been a background figure at HP, is thrust into the spotlight by his stance against the merger.
November 12, 2001
Politics tear at deal from the inside
The companies aim to combine into "one strong new culture," but that may not jibe with the storied HP Way.
December 3, 2001
Will layoffs spoil workers' allegiance?
The lack of ardor toward the merger should not surprise HP, whose employees reacted with signs of bitterness to this year's massive layoffs.
July 26, 2001
PC sales flu infects servers
Even if the companies manage to close their deal, they still face fiscal concerns in the carnage of the withered dot-com revolution.
June 12, 2001
Failed merger would be painful
The deal may not be an ideal fit on paper, but unwinding it would put the future of HP and particularly Compaq--which this year dismantled its Alpha development team--at risk, analysts say.
November 12, 2001

• Packard Foundation opposes merger
• HP Labs eager for Compaq deal
• HP profits fall, but beat estimates
• HP cuts more U.S. jobs
• Dell backs off HP printer sales
• Dell dogs PC rivals
• Compaq: Life after Alpha
• Dell's No. 1; beats Compaq
• Compaq to cut 5,000 jobs
• HP revamps software vision