HP and Compaq merger approved by EU

HP and Compaq merger approved by EU

The European Commission has approved the acquisition of Compaq Computer Co. by Hewlett-Packard Co. for the European area without any conditions. Through a careful analysis of this largest of all mergers in the IT sector, it was possible to rule out a monopoly position for the emerging giant.

The competition watchdogs of the European Union justify their quick decision, which is based on the fifteen countries of the EU, as well as Iceland, Lichtenstein and Norway, especially with the strong enough competition in all areas in which the IT giant will be active with an expected turnover of over 85 billion dollars.

In the PC sector, companies such as IBM, Dell and Fujitsu-Siemens could easily prevent attempted price increases by the new group thanks to dealers who are only weakly bound to HP and Compaq/p>

The commission also saw no threat to the server market, as both companies only had a significant, but not overwhelming, market share in entry-level systems, while the high-end business was entirely different n will be determined.

The inspectors saw an additional critical point in the fact that HP's cooperation with Intel in the development of the Itanium processor could lead to the fact that it could be delivered exclusively in servers and workstations of the new giant, for example. Here, however, the commission warns that it is in Intel's and HP's interest to keep others from having access to this product. Finally, it was determined that the printer market was not threatened by package sales of HP printers with PCs from the new group.

However, two things remain to be considered . On the one hand, the 'merger', as the companies concerned call them, must also be approved by the American Federal Trade Commission (FTC). Since the EU Commission works closely with the FTC in its decision-makingwants to have cooperated, a similar result can be expected here.

It looks very different with the approval of the shareholders. They speak more of a 'takeover' and as reported above all, the descendants of the company founder of HP under the leadership of his son Walter Hewlett offer bitter resistance. He sees the unconditional approval from the EU Commission only as proof that the merger will not give the company a leading market position. The CEO of HP, Carly Fiorina, whom he hated and highly praised by the trade press, was very satisfied with the decision and announced that the decision of the commissioners was an encouraging step for them on the way to satisfying competition watchdogs around the world and giving them away convince that, against all fears, the merger will provide new impetus in the competition for the IT market.