Shareholders of Compaq Computer approved the company's planned acquisition by Hewlett-Packard (HP) by a nine-to-one margin, Compaq announced Wednesday following a special shareholder's meeting in Houston.
The official result of HP's shareholder vote, which closed Tuesday, is not yet known. HP said preliminary results show the merger has been approved by what Chairman and Chief Executive Officer (CEO) Carly Fiorina termed a "slim but sufficient" margin. Opposition leader Walter Hewlett, an HP board member and son of a company founder, said the results are too close to call and that he remains "optimistic" the acquisition will be defeated.
IVS Associates is handling the vote tabulation and will certify HP's vote outcome, a process expected to take several weeks.
The Compaq shareholder meeting was a more amiable affair than the HP vote a day earlier. Laughter could be heard at The Wyndham Greenspoint Hotel in Houston, as a calm Michael Capellas, chairman and CEO of Compaq, answered questions at a press conference after the vote.
"This is an unbelievable movement in terms of the industry," Capellas said. "There are few companies that have the global reach of this entity."
Capellas called the merger the highlight of his career and cracked several jokes during the press conference. His counterpart at HP, Fiorina, faced a much tougher crowd Tuesday.
At HP's vote, in Cupertino, California, throngs of objectors to the acquisition lined up outside The Flint Center, one of them beating a drum and several handing out flyers calling for investors to vote against the deal. Critics grilled Fiorina during a question-and-answer session at the vote, with some current and former employees saying management misled them. One engineer claimed he had worked at HP more than 20 years but would quit if the merger were approved.
Capellas' toughest questions came from Houston-based reporters who asked how the deal would affect the city's economy. A combined HP and Compaq would have close to 155,000 employees, of which 15,000 will be let go as the companies link their businesses, the companies have said.
Capellas tried to assuage local fears by reiterating that Houston will be a focal point of the merged company.
"Houston very clearly is strategic," he said. "We have incredibly important parts of our revenue stream based here. It is a very cost-effective place to work. The decision to move out of Houston does not carry a lot of business sense."
A number of Compaq product lines will probably play a big role in the combined company's future. So far, executives have said that Compaq's high-end fault-tolerant computers, low-end servers and storage products are the biggest complements to HP's strengths in Unix servers, printing and imaging.
Objectors to the deal have said a merged company would be shackled by Compaq's large PC business, claiming this market is too competitive to generate large profits.
HP and Compaq executives position the deal as a way to offer customers a variety of gear and then provide lucrative professional services to back the products up. The company could thus compete more effectively against IBM Corp. for service-driven business.