A CASE OF

MERGERS : THE HP
EXPERIENCE
Learning Group Members:
1. Tonmoy Saha-010112137
2. Ranit Kundu-010112055
3. Snehasis Basu-010112108
4. Subhra Manna-010112002

A CASE OF MERGERS: THE H-P EXPERIENCE

According to the case synopsis we understood that the case concerns the
strategic management of corporate mergers and reviews the Compaq computer
corporations acquisitions of Tandem Computer and Digital Equipment
Corporation(DEC) and the subsequent Hewlett-Packard(HP) acquisition of the
resulting expanded Compaq firm.
This case study is focused on
1. Key Process , 2.How mergers were handled situation
differently,3.Strategic Aspect of merger,4.Cultural and Human Factor
involvement.
We were go through the case study sequentially and raise some situation which
can under situation analysis.

Situation Analysis:
The merger with Compaq Computer Corporation and Hewlett-Packerd
merger in 2011.Both were very large firms, with the latter being the
second largest computer company, Behind the IBM when then had a lead.
HP(Hewlett Packard) had pre-merger revenues of $45 billion(Fiscal
2001)with over 88000 employees around the world. Compaq Computer
Corporation ranked just behind HP, with the revenues of $42 billion in
Fiscal 2001.

 HP merger with Compaq it is necessary for Jo kopi (The management

employ of HP) their post merger evaluator to understand Compaq earlier
acquisition of Tandem Computers in 1997 and Digital Equipment
Corporation.

Tandem Computer founded by Houstonian Jim Treybig in 1974 had a

highly successful direct sales force system that were well known for
exceptional reliability and provided Compaq with much better access to
corporate accounts. Treybig had built a company with a distinctively
relaxed laid back laid culture that Apple, Google and Facebook were but
dreams at the time and their well known supportive and easy going
cultures were not even in existence. Tandem was one of the first of these.
In 1998 DEC acquired was coveted by Compaq because of its highly
successful multi vendor service business.DEC huge group of 23000
professional provided a wide range of consulting services to corporation
without regard to the brand of hardware they were using.DEC had
supportive culture where employee involvement was valued and
employees were consulted as major decision were being evaluated.

The merger with Tandem went smoothly for the most part. The cultures
of Tandem and Compaq were very similar with both companies having
been entrepreneurial in nature from the very start. To encourage the
change and gain shareholder approval DEC shareholders received $30 in
cash and an estimated 0.945 shares of Compaq stock for each share of
DEC stock. Compaq issued approximately 150 million shares of its stock
and paid $4.8 billion in cash (Kanellos & Kawamoto,1998).

 The DEC integration with Compaq seemed from the operational disaster.
The merger seemed to have no planning other than for the Financial
implication Leadership was none existent and every decision that was
passed down was vigorously debated and most of the time grudgingly
accepted. Sometimes the decision was just ignored. There was little
coordination among organizational functions which were often duplicated
across the three companies with each unit relying on its own established
set of operating policies and procedure.

During the merger Jeff Clarke who came to Compaq from DEC and was
subsequently chief financial officer of Compaq was the leader of
integration team he lamented that Compaq never really seemed to have
product road maps in mind after the merger the new established
organizational structures were constantly changing and that there was
little accountability related to the financial plans after the DEC merger.
In 1999 Lew Platt (CEO of HP) retired and Carleton Fiorina took over as
president and CEO. Fiorina known as early had been an executive vice
president at AT&T and had coordinated the spinoff of lucent Technology.
After that some year later on September 3, 2001 HP announced that it
would merge with Compaq creating an $87 billion company-costing $19
billion the largest IT industry merger in history.

On March 2,2002 with approval from the Federal Trade Commission on

March 6,2002(Hewlett-Packard 2002).Walter proceeded to contest the
result in court arguing that HP had misled the shareholders. His protest

was not successful and merger become legal on May 3,2002.While this
battle was going on, Fiorina and Capellas were thinking seriously about
the next steps after approval and three days after merger was legal, the
new HP was launched as one company. Fiorina held the title of chairman
and CEO and capellass was appointed the president and chief operating
Officer of new HP.
On September 2001 early time period (First announcement of merger
intent)until early May 2002 (Final approval)covers eight months. Fiorina
and cappellas did not waste this time. Jeff Clerke then chief Financial
officer at Compaq after serving as DEC integration manager during the
Compaq merger with DEC was chosen to head the merger integration
team along with Webb McKinley a 33 year veteran at HP. Clarke was
considered to be shrewd HP was considered to be an organizational
mastermind of doing things HP way. Almost 2500 people were involved
by the time that merger was complete .A clean room team that was
establish priorities and future operational details for the newly merged
companies.
o The New HP was ready to roll when the final merger was
approved. Workshops were conducted for all 155000 employees in
the merged company. The work hop program was started called
fast Start and was intended to help with transition to get all
employees on board with new business models and process charge.