Bstr202 click on the button below, and select the case from the list of available cases. Q what were the main problems encountered during the hpcompaq merger. The titans of the computer hardware industry specialized in unique products and services. Soon after, regulators in the united states and european. Hewlettpackards acquisition of compaq may be complicated and poorly timed, but some experts say undoing the deal could be disastrous for both companies. Hpcompaq merger completed rebel hewlett packard shareholder walter hewlett gave up his fight to block the acquisition on wednesday after losing a court case. Fiorina did not believe in the hp way, and she just followed its dictates. The new hpq stock began trading on may 6 as the new company launched into action around the world.
Had fiorina failed to effectively sell the deal to hewlett and packard family. Of particular interest are the impact on earnings per share i. After the longawaited meeting of hewlettpackard shareholders, the company declares that it appears to have won the proxy fight. It further discusses the discussions of analysts and some stakeholders position of the merger and how it eventually turned out. Although executives have characterized the deal as a merger of equals,the new hp, as they are billing it. Case tells about circumstances of computer hardware industry at 2001,market was highly competitive, frequent and fast product. Hp compaqa failed merger hewlett packard mergers and. Included are completed valuations of both hp and compaq and detailed summaries of. Hp compaqa failed merger free download as word doc.
Hp news hewlettpackard and compaq agree to merge, creating. To critics who questioned hps motives for the deal, fiorina emphasized that the chief driver for the hpcompaq merger was competitive positioning. The deal was agreed by shareholders and the deal has now been closed, clearing the way for the launch of the new combined company on 7 may. We looked for best practice at both companies and used an adopt and go system. Culture due diligence during hpcompaq merger values enabled the realization of the merger making it possible to build a new organization value democratization is a process of forming a new organizational society by discovering common values core values were not imposed on the employees by top management the process of. They each have different strengths and the surviving company name will be. In the case of the hewlettpackardcompaq merger, what are likely to be the main. A key study pdf noted hewlettpackards systematic approach. Mergers and acquisition a case study and analysis of hp. A the major challenge for us was the size of both companies. Strategy valuation and deal design case analysis submitted by. Hpcompaq merger faces stiff opposition from shareholders stock prices fall again, 2001 strategic analysis of the case. Et ceo expects tough times ahead for merger, still thinks hpcompaq merger can succeed. Increased competitive advantage resourcebased view intangible resources.
Hp and compaq merger the failure of the merger between two leading competitors in the global computer industry, hewlettpackard company hp and compaq computer corporation compaq failed as the synergies identified prior to the merger did not materialize. Pdf in 2002, a money manager is considering how to vote her shares in hewlettpackard. At the oneyear mark of the giant hpcompaq merger, the combined company appears to be doing better than expected, forrester analyst rob enderle told. February 01, 2006 this is the fourth of a fourcase series. Whether a company hire outsiders to help or not, postmerger integration pmi is needed with every part of the business.
One of the largest cultural clashes identified within the hpcompaq merger was speed. The paper discusses the nature of a merger and one of the biggest mergers in the last ten years i. But 10 years later, partners reflect on the historic deal and how it changed hp for the better. The hpcompaq combination, however, has not been touted as a merger of equals by either company, ms. Hpq hp and compaq merger free download as powerpoint presentation. May 17, 2002 failed hp compaq merger would be painful. Scribd is the worlds largest social reading and publishing site.
Carly fiorina, the then ceo of hp was initially opposed by both the hewlett and packard families and later to the directors and the employees, but she finally managed to pull it off. Under the terms of the agreement, unanimously approved by both boards of directors, compaq shareowners will receive 0. In march 2002, the vote came down to a thin 3 percent majority for the merger, with recrimination on both sides. For those of us involved in the merger, it certainly was an exciting. Hewlettpackard hp was founded in 1939 by bill hewlett and dave packard. Need to attack the enterprise market more aggressively primary engine for value creation. Hp to take merger to shareholders december 11, 2001. The case gives an overview of the merger between two leading players in the global computer industry hewlett packard company hp and compaq computer corporation compaq. A corporate merger, like a marriage, can yield a whole stronger than its parts or it can end in utter disaster. May 01, 2006 hp and compaq merger the failure of the merger between two leading competitors in the global computer industry, hewlettpackard company hp and compaq computer corporation compaq failed as the synergies identified prior to the merger did not materialize. Good planning by hr team helped smooth hewlettpackards. Like all smart investors, however, macalester knew that the tradeoff between deal terms and pricing could mean the. Gartner group research has indicated that the merged company has failed to do a good enough job of presenting the benefits of an acquisition of this scale to justify the deals risk as it is generally known that technology mergers rarely work. Business strategy case studies case studies collection business strategy short case studies view detailed pricing info how to order this case business case studies.
But although the logic of the merger was correct, executing it was difficult. The case describes in detail the rationale for the hpcompaq merger, the problems faced in integrating the merged entities and whether the merger made business and economic sense. In july 1999, carly fiorina became the president and ceo of the company. But 10 years later, partners reflect on the historic deal and how it changed hp. The author also discusses how shareholders began asserting their rights and power especially in the hp merger with compaq. Project management section of our research repository. The merger also did not help hp to compete with ibm, which not only sold pcs 3 but was also a market leader in the highmargin consulting and service businesses. Hp shareowners will own approximately 64% and compaq shareowners 36% of the merged company. The boards of directors and management teams of both companies, hp and compaq, had a key role to play in the merger that look place in 2001. The c case uvaf1452 describes the outcome of the proxy contest. It was the year of the hpcompaq mergerand it was either the best of. The tasks for the student are to critically assess the specific design of the deal and its impact on shareholders. Hpq hp and compaq merger hewlett packard mergers and. Hewlettpackard gains key backing for compaq merger the new.
Here he answers questions on how to handle mergers and acquisitions. Both companies have significant brand recognition and brand loyalty in it industry with strong customer base and market share. As the corporations pursued diversification in their product portfolio, by the late 1990s, the competition amongst ibm, hp, compaq, and dell grew fierce. Hewlett adds, would diminish the role of the companys lucrative crown jewel, the computer printer business. A walkthrough of a merger valuation 2 hps major concerns. Analysis of merger between hp and compaq 2687 words. Ultimately, it turned out to be a good move, says burgelman. Hp compaq merger the computer hardware industry has been growing faster every year since its inception.
Resourcebased view the merger of hewlettpackard and compaq strategy and valuation hpcompaq decision support the merger. This indicated that the merger had failed to create shareholder value. A merger usually happens when two companies are combined and the resulting company takes the form of the company who bought the other company. Deal design reflecting on her prior analysis, kathryn macalester was comfortable with the pricing, and believed there were strategic benefits to the proposed merger. The managements take on revitalizing hps growth was grossly ineffective for the following reasons. The merger of hewlettpackard and compaq by maria knight on prezi. In summary, says burgelman, establishing the logic for the integration and setting the performance goals were right on target. Strategy and valuation article pdf available january 2008 with 5,3 reads how we measure reads. The hewlettpackard and compaq merger semantic scholar. It highlights that the leadership, legacy and cultural issues play an important role in mergers. Hp compaq merger case analysis by balajiv ganesh in. Cultural issues in hp and compaq merge by alan herrera on. At first glance, hewlett packard hp doesnt seem to be a family firm, but when push comes to shove as it did during the controversial hpcompaq merger family matters. The case describes in detail the rationale for the hp compaq merger, the problems faced in integrating the merged entities and whether the merger made business and economic sense.
The merger was hewlettpackards response to sweeping changes impacting the technology industry. A ceo will always consider such a merger to be an occasion to take a competitive advantage over its rivals like ibm as in this case and also be of some interest to the shareholders as well. By 2000 hp had 85,000 employees and revenues of 48. After the longawaited meeting of hewlettpackard shareholders, the company declares that it appears to.
Sep 02, 2010 hp compaq merger faces stiff opposition from shareholders stock prices fall again, 2001 strategic analysis of the case. From summary section of hpcompaq joint proxy statementprospectus dated february 4, 2002 page 7. The hpcompaq merger oneyear checkup special reports. An hp spokeswoman said compaq shareholders would get letters explaining the stock swap in the next week. But the heart of the hp way is the notion of trust, and the ultimate manifestation of that trust is in open communication from the top of the firm to the bottom. Apr 21, 2020 at the oneyear mark of the giant hp compaq merger, the combined company appears to be doing better than expected, forrester analyst rob enderle told the ecommerce times. Under the terms of the merger agreement, a wholly owned subsidiary of hp will merger with and into compaq and compaq will survive the merger as wholly owned subsidiary of hp. The case revolves around the hp compaq merger and the herculean task it was to merge the two companies. Hewlettpackards acquisition of compaq may be complicated and poorly timed, but some experts say undoing the. Where fiorina failed and where hurd excels was in educating hp managers and employees on how to realize the cost and operational efficiencies and translate those into higher margins for each. If you think of a corporate merger as a marriage, then you can see that there is still as lot of work left to do after the wedding date day 1. The official merger got through on 4th september 2001. Hewlett and his advisers noted, big mergers in the fast. Investors and security holders of hp and compaq are urged to read the definitive joint proxy statementprospectus filed with the sec on february 5, 2002 and any other relevant materials filed by hp or compaq with the sec because they contain, or will contain, important information about hp, compaq and the merger.
The hp way brand recognition reputation human capital tangible. The merger decision group no 3 ninad nigam vivek sharma 16 31 abstract of case the spirit of case is primarily based on the issues related with potential acquisition of compaq by hp. Jan 21, 2002 the san francisco business times features local business news about san francisco. Hp compaq merger the computer hardware industry has been growing faster every year since its. He was responsible for bringing together two cultures and more than 42,000 staff from across europe, the middle east and africa. Mergers face many obstacles on the road to completion and the hp. The case explores the reasons for hps failure to realize the synergies identified prior to the merger. On may 3, 2002 hp announced that it had completed the acquisition of compaq. And because senior management failed to follow through, it failed to achieve the full promise of the merger, says burgelman. Feb 18, 2003 as vicepresident for hr at hewlettpackard, hugo bague was a key figure in the companys merger with compaq last may.
Remote work advice from the largest allremote company. Dec 11, 2001 hp to take merger to shareholders december 11, 2001. Hewlettpackard gains key backing for compaq merger the. To push the merger through, hp hwp must get support from a majority of shareholders. Good planning by hr team helped smooth hewlettpackards merger. Finally, if the merger failed to gain approval, fiorina would almost. This naturally led to market disillusionment, and the stock price fell. At first glance, hewlett packard hp doesnt seem to be a family firm, but when push comes to shove as it did during the controversial hp compaq merger family matters.
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