HP Merger FAQ

Nate Orenstam
Sunday, March 17, 2002

You Had To Ask...

Here is the unofficial FAQ (Frequently Asked Questions) regarding the HP / Compaq Merger.

Why does this merger make strategic sense for HP and Compaq?

This merger creates an $87 billion global technology behemoth that can lose money for a long time while the management tries to figure out who to sell the combined company to.

I thought the plan was to run the new company with some new strategy?

Strategy, shmategy. What matters is getting the share price up. I'm sure you've heard of the "Greater Fool" theory of investment: you buy overpriced stock in the hope of selling to to someone to a bigger fool. Well, the same thing applies in mergers and acquisitions. After all, look at DEC and Tandem. Besides, the company's already spent far more promoting the merger than they've ever spent marketing the products.

Who approached who?

Technically the question should be "Who approached whom?"

Alright then, Mr. Smartypants, who approached whom?

Carly first noticed Michael 18 months ago while at a cocktail bar in Houston. Carly asked Michael if he'd like to explore licensing the HP-UX operating system for use in Compaq's line of servers. When Michael said "yes", Carly felt her heart go pitter patter like an HP Oscilliscope from years gone by. They had drinks and the discussion eventually led to more, ah, strategic possibilities.

Have they "done it" yet?

No. Carly and Michael are both very happily married and in they would never "do it" with another CEO until the merger is, well, consumated. Check back after the votes are tallied.

What about the photos I saw on the Internet?

While the participants look a lot like Carly and Michael, it could be anyone behind that leather mask. We'll need to keep those photos for now.

Why do you believe you'll be successful in combining the two companies.

Because that's what Carly told us to say if we wanted to keep our jobs.

What will the new company be called?

The new company will continue to be called Hewlett-Packard.

What will the old company be called?

Look, there is no old company once the merger is finalized. It just becomes part of Hewlett-Packard.

Well then what happens to HP?

HP means Hewlett-Packard. It's the same thing.

Can I still buy Compaq products?

Yes, you can still buy Compaq computers, laptops, servers whatever the heck else they make.

I thought you said Compaq is gone.

Look, the company is gone, but the products, well, you can still buy them. Only they'll be sold by HP. And we'll probably have a big garage sale with all that Tandem and DEC equipment still sitting in warehouses.

What happens to Walter Hewlett if the merger is approved?

Carly will ask Walter Hewlett step down from the board of directors. And he certainly won't be getting his summer job back. Also, if the merger is approved, he's going to be forced to change his name to Walter Compaq.

Do you expect any anti-trust issues?

No, Carly is an expert when it comes to anti-trust. According to employees she's the Some say she exudes anti-trust.

How many job reductions do you expect from this merger?

Consistent with the HP Way of respecting all employees, those in non-revenue producing jobs (e.g. Engineering, Marketing, Finance, Accounting, HR) will have the option of working in other capacities, such as manufacturing operations located in China.

What does this merger mean for me?

I barely know you, how the heck should I know. I don't even know what it means for me and now I bloody well own HP stock.

What will Carly's role be in the new company?

Carly Fiorina will continue as CEO of the company continuing to provide the leadership, management discipline and power suits she's provided since she joined HP. She's also going to go out and spend some of that new multi-million compensation package she's got coming. Maybe get a new hairstyle, pick up a few more private jets. Also, focusing on shareholder value and all that.

What will happen with Compaq CEO Michael Capellas?

Capellas will continue on working at the HP, though in a lesser capacity. Carly will run the strategy, technology, day-to-day management, sales, marketing and finance. Capellas will focus on other areas such as his golf game and playing guitar. His official title will be CBO, Carly's Boy Officer. He will also make a guest appearance on the HBO hit show The Sopranos, playing the part of Micky "choir boy" Capelluci, a con man who sells an empty warehouse to a cheap blond for millions and then flees.

Who do I call to get my rebate on a Compaq iPAQ MP3 player I bought last fall? I sent in the paper work and got bupkes.

Sounds like a personal problem. Still, if you vote for the merger, maybe we can take care of this for you.

How are you gentleman!!

All your base are belong to us.

What you say?

You have no chance to survive make your time. Ha ha ha ha.

About the author
Nate Orenstam is a Java consultant who now owns several shares of HP stock.

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