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HP/Compaq Merger Apparently Approved
Spinality writes "Looks like HP's hotly contested merger with Compaq is going ahead. Various news headlines such as this one at Bloomberg.com report that stockholders voted to merge, against the wishes of the Hewlett and Packard families. " There isn't official word yet, but this looks like
it's pretty much a done deal. Anyone else think the business world looks like a
game of Pac Man?
Anyway, here's what HP has on their own site. Looks like most bridges have been burned in this one and if it doesn't actually go through HP's going to look like a pretty sorry mess. Too bad the combatants in this one didn't keep the vitriol out of the press, i.e. one page ads in the SJ Merc, or the 'dillitante' remarks.
IBM must be aware that even if it does go through, it's a house divided, which will take some time to come together, if ever.
A feeling of having made the same mistake before: Deja Foobar
This merger did not make sense for HP. Why would a company that is trying to get out of the desktop computer business buy another company that has a large desktop manufacturing facility. I agree with the Hewlett family for blocking this merger. Just because the merger might be approved by the voters by the narrowest of margins does not mean this is good for HP. HP is paying too much for bigger stake in the low margin pc market. What happened to HP's focus of delivering services?
May I recommend Kim Stanley Robinsons Red/Blue/Green Mars Trilogy. Unfortunatley I can't find any links relating to the corporate intrigue found in these novel's and the picture the author paints of earth's near future but maybe you'll have more luck if you haven't read the books!
Never underestimate the dark side of the Source
Ever notice how these mega-corps seem to keep getting larger? All we need now is the AOL/Time-Warner/Microsoft/Compaq/HP/Sony/Walmart/N ike/Kroger merger to take place and we will never need to know anything except how to get to the "Super Store". This sure seems to me that it makes it harder to break into the business. Sure, having a superb product helps, but if you can't get past the monopoly, then you will have a hell of a time getting to the consumer.
Don't care if Carly is running HP into the ground but respect her Linux friendlyness?
Allow me to weild the clue-stick here. If HP disappears because Ms. Fiorina wants to measure dicks with Mr. Palmisano of IBM, she might as well be giving weekly handjobs to Mr. Torvalds for all the good it will do Linux.
In fact, if HP does get involved with Linux heavily and then goes down to mismanagement, they'll become just more fodder for the MS FUD machine: another Linux comany bites the dust.
"As God is my witness, I thought turkeys could fly." A. Carlson
In 1998, or 99, Compaq bought out DEC in order to get the rights to the Alpha chip, and then didn't know what to do with it once they owned it. The already dwindeling VMS operating system became less popular as a result. Compaq directors needed to get out from under a badly handled situation, so they found a sucker.
HP finds its printer division doing very well and its computer devision growing too slowly, so they take the money from one and sink it into Compaq. It could work out well for HP, if and only if, they use the Alpha technology to their advantage. The desktop devision sucks anyway, and should not be considered as HP's salvation.
Tune in next week when . . .
There goes 15 years of my loyalty as an HP customer down the drain in one shot.
sPh
The whole HP-Compaq merger thing is a typical example of how high-level executives who understand "business" think:
- They have to "do something" to justify their compensation.
- They don't understand the technology, so they don't have a clue as to how to make use of the innovations their employees generate (Xerox comes to mind immediately, but they're just the most obvious example).
- They do understand high-level finance, and how to fire people to create short-term gains.
So, they do what they understand - move big pieces around on the board, construct complex financial objects that obscure the connection between their actions and company performance, and fire people whose functions are superficially redundant.
To a Lisp hacker, XML is S-expressions in drag.
This could cause serious fragmentation of the Beowulf clustering market.
For a long time HP have been pushing their Wolverine Extensions (much to the dismay of clustering gurus). With the might of Compaq behind them they'll have the impetus to succeed.
Although, on the bright side, it brings Windows into the Beowolf fold.
Guess we'll have to learn that API now!
I have a pitiful few shares of HP stock from my time there, and over the past few months, I've received an absolute torrent of competing proxy solicitations from the HP board and Walter Hewlett. Every week, I got at least one new proxy card from each party with a "send this in Right Now" letter. This stuff arrived faster than one could conceivably respond (and even though I'd promptly returned the first green proxy card I got...) Towards the end, the HP board even priority-mailed me a prepaid Fedex envelope with another proxy card, and shortly thereafter a premetered ($3.50) priority-mail envelope. Last, and IMHO rather underhandedly, the board set up a phone-in-and-vote-your-proxy process during the last three or so days, something they would NEVER have let their opposition get away with. UN election monitors would NOT approve...
Also worthy of note is the tone of the cover letters: the Walter Hewlett "anti" camp focused on the bad business sense of the merger, but the Board quickly started a series of personal attacks on Walter Hewlett. This did NOT impress me with their confidence in their case: when you run out of logical arguments, slander your opponent's person.
It ain't over 'till the fat lady sings, and there is NO reliable way to guess who'll still be standing to deliver that final aria. The tons (literally!) of proxy cards sent in to the warring factions' accountants must be sorted and matched by sig and date to weed out proxies revoked by subsequently-sent proxies (and since so MANY cards were sent out, there'll be hundreds if not thousands of revotes); this will certainly take a week. Also consider (shock horror!) the possibility that the electronic or telephonic proxy-submission processes might have been manipulated. Carly's no Ken Lay, and it sure ain't the HP Way, but there's a LOT riding on this (several top management jobs, for example), so the possibility of skulduggery is NOT to be ignored.
"My strength is as the strength of ten men, for I am wired to the eyeballs on espresso."
I'm not sure how much Compaq will "suitize" HP. There is a good chance that Compaq will, in the end, be the one who takes over Hewlett Packard, not the other way around. There are alot of strong wills in the Compaq organization, not the least of which are the ex-Digital people. (The general opinion of about a year ago, when I was working in Compaq for a consultancy was that while Compaq had forked out the money, it was Digital that took over the company...a whole lot of dirty politics and strong wills battling in there) It wouldn't surprise me if Compaq reshapes HP more than the other way around, but there aren't that many actual suits running around in Compaq's Houston offices. I thought it was an extremely loose environment, but then I've worked for some real tightasses.
Anyone else think the business world looks like a game of Pac Man?
It's pure math, really. There is a significant, steady stream of new businesses being created, even if you only count the ones that make it past the infancy stage. Additional ones are being created buy spin-offs/spin-outs/demergers/whateveryoucallits.
In a country with a relatively stable population, this can only mean one of two things: Either the average size of firms must be decreasing, or a number of firms must be disappearing. The strongest of these two factors will of course be the latter. Given that the two ways in which companies can disappear are bankruptcies/liquidations and mergers, you could say that mergers are good. Even if a merger is followed by layoffs etc., a company remains to pay severance packages and face other liabilities. Furthermore, a merger is usually less wasteful than closing a company, as valuable assets such as brand names are more likely to be preserved.
In a dynamic world with quick changes in technologies and customer preferences, continuous restructuring is necessary and desirable. Mergers are important mechanisms of such restructuring, alongside entrepreneurship, bankruptcy, strategic alliances etc.
On an radio commentary on this merger, it was pointed out that at the time of the HP acquisition of Apollo, HP was #3 in workstations, Apollo was #4.
Part of the justification for the deal was that by the numbers, together they'd be #1 in workstations.
After the acquisition, the combined company shortly became #5 in workstations.
I'd guess that it was Sun, DEC, HP, Apollo, etc., then it became something like Sun, DEC, IBM, x86-based Unix boxen, HP.
I have friend who used to work at HP and still owns stock. Two things he says:
1. a. He is not for the merger
b. Does not have a single friend who is for the merger
c. Does not have a single friend who knows
of another co-worker who is for the merger
2. a. He does not like Carly
b. See 1b
c. See 1c
Too bad to see a company run by engineers now being led by a history major(i think).
For what it's worth.
The reasons that this merger is just fine with the government are pretty simple. There's a measure for each industry called the Herfindahl-Hirschman Index. If a merger doesn't make this number go over a certian boundary, it's all good. HP and Compaq are in an industry that is diversified enough to handle a horizontal merger like this one.
I work at HP and - I do not know *anyone* who has voted to merge with Compaq. No one at benefits from this except for upper management and high up execs. Fiorina is pulling a scam and it is altogether to obvious.
If this actually goes through in the next couple weeks, I expect a lot of people to jump ship and move on to brighter pastures. She certainly has created a lot of animosity within the company and she should expect a major backlash from employees.
You just don't see many of those in store shelves, so Apple looks expensive.
I bought an original Bondi Blue iMac in the fall of 1998. (I was poor at the time, so I financed the machine through Apple Credit. I paid it off well ahead of the eight year term, though.) It was $1,299, and it was my fourth Mac... I had previously owned an LC, a PowerBook 145, and for four years, a Quadra 840av. (Easily the most stable and "personable" computer I've ever owned, even including the iMac.)
My wife eventually started using the iMac so much that I decedid to get myself a machine. I didn't want to spend another 1300 bucks, so I built a PC and had someone give me a monitor... It was a Celeron 333 running at 500MHz, and it cost me about $700 to build over several months.
By this time, my wife wanted to watch DVDs on her machine... sorry, I said, it can't do that. So I bought a set-top box, and she was happy. Then she saw her friends making mix CDs, and she wanted to do that. OK, we can buy an external USB CD-RW, but it's $300 (year 2000) and it's limited to 4x. No thanks; I put a 16X CD-RW in my PC and it worked fine for $100.
She needed a bigger hard drive (we replaced the 4 GB drive in the iMac with a 36 GB for $200), and added 256 megs of laptop RAM for $120. Thank God for standard components.
Eventually she's compaining that the processor is too slow. So OK, I put a Celeron 800 in my PC, and give it to her. (I'm a little more liquid by this time, thanks to a big promotion.) She bitched about the UI differences for exactly two days, before realizing that Win2000 had actually run Eudora and Netscape for two days without crashing. (This was a problem on the iMac.)
So, I get another PC now. (Mid 2001.) Go down, look at slot-loading iMacs with CD-RW and a decent amount of RAM, $1500. Look at G4s, drool, and see $1700 with no monitor. Go to newegg.com, and build an Athlon 1600+, 512 megs DDR RAM, NIC, SB Audigy sound, GeForce2 GTS video, case, keyboard, mouse, floppy, 40 gig hard drive, 16x CD-RW, 16x DVD-Rom drives. Approximately $700 including shipping. Run down to Walmart and buy a Radius 15" TFT monitor (which I cannt say enough good words about, especially with zero dead pixels) for $375.
For less than $1100, I now have a system that is at LEAST as powerful as a flat-panel iMac, though not as pretty. And it doesn't run OS X, which is a nice OS. But I still haven't had a single bluescreen on either of my home-built Win2k boxen. Now, for $400 more, I could have got a nice flat-panel iMac with the SuperDrive and all the sweet Apple consumer apps on it, but with this system, I can swap out the vidcard and sound card at well, and use DDR DIMMs instead of laptop SDRAM.
For what it's worth, I traded in the old iMac with $500 in cash for a bitchin' 1976 Mercury Cougar XR-7. I still have a couple of my old Macs laying around, but now that I can Q3/Wolfenstein all night on my ugly Windows box, waiting for the GeForce4 Ti 4200 to come out...
SlashSigTheorem: Humorous, Political, Critical, Constructive- If you have a
There's a funny thing about proxy votes. The more stock you own the more your vote means. Also, because this is a proxy vote the proxy has a mini vote and the majority choice is cast as a single vote from the proxy. If you've got 100 people behind a proxy and 40 vote against the merger, the proxy vote will be one for the merger. Add up enough proxies and you've got a sizable number of people voting against the merger. Fiorina is declaring victory far too soon in my opinion and according to most of the business papers I've been reading the opinion of many.
I don't get the projected numbers Fiorina has been throwing in everyone's faces. In all honesty she wants Compaq for production lines, some IP, and retail contracts with most notably Radio Shack. Between Radio Shack and WalMart Hewpaq would have a pretty big retail presence. Not everybody has a Best Buy, CompUSA, or Circuit City within an hour drive. They probably however have a RS or WalMart within an hour drive. If people are interested in a PC, retail chains are where they head to. However unlike the 2 + 2 = 5 numbers Fiorina is pulling out, HP and Compaq would not be expanding their markets. They would just consolodate shelf space. This doesn't lead to higher growth.
HP has gone from a company that actually progessed the state of technology to merely a competitor to Dell for presence on the desk. In the short term with decreased competition in retail space from Compaq, HP will do well. In the long run when the retail chains Hewpaq relies on start doing poorly they are going to suffer severly. In the said areas where HP and Compaq are prevelent, for some the only two choices, the market is going to become saturated very quickly due to the lack of demand. Sales of both companies' systems are already low, merging would just mean they would be collectively low even if their overall market penetration was greater than that of IBM. It's also funny how HP has twenty billion to spend on the Compaq merger yet needs to lay off 15,000 people. Next to go from HP will be their printer business at which point Dave Packard and Bill Hewlett will lead an army of zombies and demons out of Hell into Cupertino to make off with Carly and her minions.
I'm a loner Dottie, a Rebel.