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EU Is Set to Clear HP’s Merger With Compaq

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Associated Press

The European Union is poised to clear the $23.1-billion merger of Hewlett-Packard Co. and Compaq Computer Corp. without requiring divestitures, a source close to the negotiations said.

The EU has a deadline today to announce whether it will approve the deal or launch a four-month investigation into antitrust concerns.

Amelia Torres, a spokeswoman for EU Competition Commissioner Mario Monti, said only, “There has been no decision. There will be an announcement Thursday.”

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An in-depth probe by the European Commission would be especially problematic for Hewlett-Packard as it tries to rein in rebellious shareholders, observers said. Instead, early clearance in Europe could help Hewlett-Packard win over some shareholders.

Hewlett-Packard and Compaq together would have about 22% or 23% of the European market for personal computers but about 47% of the market for more powerful servers and disk storage units, according to researcher firm Gartner-Dataquest.

Palo Alto-based HP and Houston-based Compaq have said they would await regulatory clearance before setting a date for a shareholder vote.

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The U.S. review is still underway.

HP shares gained 39 cents to $29.92, while Compaq rose 77 cents to $11.99, both on the New York Stock Exchange.

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