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EC clears Compaq-DEC deal

Compaq says that the deadline for the European Commission to take further action on the proposed merger with Digital has expired.

Compaq Computer (CPQ) said today that the deadline for the European Commission to take further action on the company's proposed merger with Digital Equipment has expired.

Just last week, analysts and company executives were hinting that the European Commission might extend its inquiry into the massive $9.6 billion merger. The commission's decision not to extend the deadline effectively closes its investigation.

The merger still is subject to approval in the United States by the Federal Trade Commission. Earlier this month, the agency requested additional information about the planned merger, indicating that regulators were not close to wrapping up their inquiry any time soon.

Despite the stepped-up probe, however, the companies expect the merger to be completed by the end of June, Compaq said in a statement today.

Regulators from both the United States and the European Commission routinely scrutinize mergers among large companies, but only occasionally request that additional documents be provided. After opening up an inquiry, regulators may block the merger altogether; approve it outright; or approve it, provided that certain conditions, such as the making of divestitures, are met.

Representatives from the FTC were not immediately available to comment on the status of the agency's inquiry.

On a related note, the European Commission has released a series of regulations in an effort to implement a sweeping overhaul to its merger review process that was initiated last year. The regulations expand the commission's authority to oversee mergers, and allow companies to sidestep individual states' review processes by registering proposed deals directly with the commission.