PALO ALTO, CA and HOUSTON, TX – Hewlett-Packard Company and Compaq Computer Corporation announced a merger agreement to create an $87 billion global technology leader. The new HP will offer the industry’s most complete set of IT products and services for both businesses and consumers, with a commitment to serving customers with open systems and architectures. The combined company will have #1 worldwide revenue positions in servers, access devices (PCs and hand-helds) and imaging and printing, as well as leading revenue positions in IT services, storage and management software.
The merger is expected to generate cost synergies reaching approximately $2.5 billion annually and drive a significantly improved cost structure. Based on both companies’ last four reported fiscal quarters, the new HP would have approximate pro forma assets of $56.4 billion, annual revenues of $87.4 billion and annual operating earnings of $3.9 billion. It would also have operations in more than 160 countries and over 145,000 employees.
The deal is expected to close in the first half of next year, the companies said.
By combining two personal computer giants, No. 2 Compaq and No. 3 Hewlett-Packard would be locked in a head-to-head struggle with Austin-based Dell Computer Corp., the No. 1 manufacturer. And they would be striking out in new directions as sluggish PC demand and savage price wars are hammering profits.
The proposed merger combines Compaq Computer Corp., a Houston-based manufacturer that latched onto the PC revolution and expanded quickly to keep pace with frantic demand, and Hewlett-Packard Co., an older, science-based technology firm that got its start in instrument testing and radio technology.
1938 — Walt Disney buys eight oscillators from California inventors David Packard and Bill Hewlett, two recent Stanford engineering graduates who get their start in a Palo Alto garage. The oscillators are used in the production of the Disney movie Fantasia.
1939 — Hewlett-Packard is born on Jan. 1, and sets up offices in Palo Alto, where it manufactures scientific testing instruments.
1951 — HP invents a high-speed frequency counter that allows radio stations to accurately set frequencies.
1957 — Hewlett-Packard goes public and issues shares.
1961 — HP’s stock is listed on New York Stock Exchange.
1966 — HP manufactures the company’s first computer, used for in-house testing.
1968 — The company introduces the first scientific desktop calculator, the HP 9100, which stores programs on a magnetic card.
1972 — The company releases its handheld scientific calculator, the HP 35, and an early computer, the HP 3000 minicomputer, built to handle engineering and research tasks and also mundane administrative data processing.
1982 — In Houston’s House of Pies, three Texas Instruments executives sketch a drawing of a portable PC on a placemat. The three, Rod Canion, Jim Harris and Bill Murto, leave Texas Instruments and start Compaq with $1,000 investments apiece. A venture capital firm agrees to fund the new company.
1983 — An Initial public offering raises $67 million for Compaq, which ships 53,000 PCs. Company stock is listed on NASDAQ.
1984 — Compaq sets a record for U.S. businesses with first-year revenues of $111 million, while introducing its desktop PC and starting sales in Europe.
1984 — HP enters the printer business, with a line of inkjet and laser printers that eventually dominate the market.
1985 — Compaq’s revenues almost triple, setting a new record. Stock is listed on the New York Stock Exchange.
1986 — Compaq again reports record revenues, joining the Fortune 500 faster than any company in history. In April, its 500,000th PC is shipped.
1987 — Compaq ships its 1 millionth PC.
1988 — HP introduces the DeskJet printer, the first mass-market inkjet printer.
1989 — Compaq introduces its first laptop, the LTE, and server, the Compaq Systempro.
1989 — On Hewlett-Packard’s 50th anniversary, California declares the HP garage in Palo Alto a historic landmark.
1991 — HP releases the Sonos 1500, an ultrasound imaging machine that lets doctors perform noninvasive heart analysis.
1991 — In midst of company’s first quarterly loss, Compaq co-founder and chairman Rod Canion is sacked by the company board and replaced by Eckhard Pfeiffer, another former Texas Instruments executive.
1994 — Compaq becomes world’s largest PC maker, and opens a manufacturing plant in China.
1994 — HP releases the Pavilion PC, the company’s first foray into the home computing market.
1996 — Compaq introduces its first handheld computer, the PC companion.
1997 — Compaq revenues reach $24.6 billion, a company record.
1998 — Compaq buys computer maker Digital Equipment Corp., for $9 billion, then closes six plants overseas and cuts 5,000 jobs, part of staff reductions that eventually total 17,000.
1998 — HP introduces the OfficeJet 700, a combination color printer-fax machine-copier.
April 1999 — Compaq’s Pfeiffer quits when reports show first quarter earnings $600 million lower than expected.
June 1999 — Compaq appoints former Oracle executive Michael Capellas as CEO.
July 1999 — HP hires Carly Fiorina, a former Lucent Technologies executive, as CEO.
June 2000 — HP spins off its scientific testing device business into Agilent Technologies, which also makes equipment for the telecom and semiconductor industries.
Nov. 2000 — HP announces its fiscal year 2000 earnings hit $48.8 billion, a company record.
July 2001 — Compaq reports first-half losses of $201 million and announces it will cut 6,000 jobs
July 2001 — HP announces it will cut 7,000 jobs.
Sept. 4, 2001 — HP announces plans to buy Compaq for $25 billion.
