Abstract

This is the second of a four-case series. Though the Hewlett-Packard (HP) Compaq merger has overcome regulatory issues both in Europe and the US, it faces stiff resistance from Walter Hewlett, board members and David Packard. Packard, Chairman of the Packard Humanities Institute, has decided to oppose the deal. Hewlett and Packard have spent tens of millions of dollars on newspaper and Internet adverts, road shows, meetings with investors, legal fees and public relations blitzes against the merger. Fiorina finally succeeds in winning the vote of shareholders by a small margin. But integrating Compaq into HP has not been a smooth process. Customers have become frustrated with the confused product lines. Concerns that the integration is not going smoothly increase when HP's revenues fall 3% for the second quarter of 2003, the first drop in nine quarters. As 2003 begins, it is becoming clear that all is not well with the HP-Compaq merger.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

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Keywords

Hewlett-Packard, HP, Compaq, Carly Fiorina, Acquisition, Takeover, Integration problems, Family, Corporate strategy, Restructuring