Fw: Compaq merges with Hewlett-Packard

Kedves Kollegak, mellekelem Michael Capellas levelet es a sajtokozlemenyt.

Fodor Zsuzsa

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> September 4, 2001
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> Dear Compaq Customer:
>
> I am writing to you personally to tell you about very important news that
> will offer significant benefits to our customers.
>
> This morning, Compaq announced that we are merging with Hewlett-Packard to
> create what will be the new global technology leader.
>
> Our new company will offer businesses and consumers a unique value
> proposition:  the most complete portfolio of information technology
products
> and services based on open, market-unifying standards and architectures.
>
> Why are we doing this?  This merger is the most effective, efficient way
to
> accomplish our strategy to be the leading IT solutions company based on a
> customer-focused, services-led business model.  The bold step to combine
> Compaq and HP accelerates this strategy and creates an even stronger asset
> base.
>
> It also makes us more responsive to your needs in an IT marketplace that
is
> changing in fundamental ways.  You want a strategic partner that provides
> comprehensive solutions, and that can design, deploy and manage those
> solutions.  With this merger, we're creating the company that will be best
> qualified and positioned to meet your needs.  With world-class, quality
> products.  Strong services delivery.  Robust solutions.  Flexibility and
> adaptability.  And that sets the pace in the industry for invention and
> innovation.
>
> Together, we bring the products, services and partnerships to best serve
> each key market segment, including:
>
> IT Infrastructure.  By combining the server, storage and software
> capabilities of Compaq and HP, we can offer you comprehensive solutions -
> servers (from industry standard servers to high-end, fault-tolerant
systems)
> that are designed to specifically address the evolving nature of an
> always-on Internet infrastructure.  Management software that allows you to
> optimize, manage and monitor your entire network.  Network storage systems
> and software that enable you to deploy storage as a utility across your
> enterprise. And the services and support to help you design, build and
keep
> it running.
>
> Services.  We will have deeper and broader capabilities in consulting,
> outsourcing and support - to help you build and manage your
infrastructure.
> With more than 65,000 professionals around the globe in the new company's
> Services organization, we want to be your partner of choice in
architecting
> your enterprise.  By combining forces, we become a top-tier services
> provider - offering a true choice in how you develop and implement IT
> projects.  As a new kind of industry leader, we value partnerships and
want
> to be the partner of choice for consultants and systems integrators as
well
> - including Pricewaterhouse Coopers, Accenture and KPMG.  So when you work
> with them, you can also choose to work with us and gain the benefit of our
> products and solutions.
>
> Access Devices (PC's, handhelds and new kinds of Internet-access devices).
> We will offer a broader range of PCs, handhelds and other Internet-enabled
> devices - via the channel that best meets your needs (directly from us,
from
> our partners, or from retailers around the globe).  With a track record of
> advanced engineering and innovation, we will continue to drive the next
> generation of Internet access across a broad range of products and
> categories.  Products that "simply work better together."  Devices that
will
> enable your team to work they want to work in the office, at home or on
the
> move.
>
> Imaging and Printing.  We'll benefit from HP's traditional core strength
in
> recording, sharing, storing and printing information, documents and ideas.
> This is the preeminent franchise in the industry, with leadership across
> commercial and consumer markets and a strong patent portfolio.
>
> We expect to complete the merger in the first half of next year and, when
> completed, we will then do business under the HP name.  I will serve as
> President of the combined company, which will be headquartered in Palo
Alto
> and will retain a significant presence in Houston.
>
> I would invite you to both visit http://www.compaq.com
> <http://www.compaq.com>  for further details of the announcement and, of
> course, you should always feel free to contact your Compaq account manager
> or representative as well.
>
> We remain committed to meeting the high standards that you have come to
> expect of us.  Thank you for your business.  We look forward to continuing
> to serve you.
>
> Michael Capellas
> Chairman and CEO
> Compaq Computer Corporation
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> HEWLETT-PACKARD AND COMPAQ AGREE TO MERGE,
> CREATING $87 BILLION GLOBAL TECHNOLOGY LEADER
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> Will Offer Businesses And Consumers Most Complete Set Of Products And
> Services, With Commitment To Open Systems And Architectures
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> Will Have #1 Worldwide Positions In Servers, PCs & Hand-helds, and Imaging
&
> Printing; Leading Positions In IT Services, Storage, Management Software
>
> Companies Expect Annual Cost Synergies Of Approximately $2.5 Billion;
> Transaction Expected To Be Substantially Accretive In Year One
>
> _______________________
>
> PALO ALTO, CA and HOUSTON, TX, September 4, 2001 - Hewlett-Packard Company
> (NYSE: HWP) and Compaq Computer Corporation (NYSE: CPQ) announced today a
> definitive 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 & hand-helds), and imaging & 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.
> Carly Fiorina, Chairman and Chief Executive Officer of HP, will be
Chairman
> and CEO of the new HP.  Michael Capellas, Chairman and Chief Executive
> Officer of Compaq, will be President.  Capellas and four other members of
> Compaq's current Board of Directors will join HP's Board upon closing.
> "This is a decisive move that accelerates our strategy and positions us to
> win by offering even greater value to our customers and partners," said
> Fiorina.  "In addition to the clear strategic benefits of combining two
> highly complementary organizations and product families, we can create
> substantial shareowner value through significant cost structure
improvements
> and access to new growth opportunities.  At a particularly challenging
time
> for the IT industry, this combination vaults us into a leadership role
with
> customers and partners -- together we will shape the industry for years to
> come."
> Capellas said, "We are creating a new kind of industry leader -- one
founded
> on customer success, world-class engineering, and best of breed products
and
> services.  In sharp contrast to our competitors, we are committed to
leading
> the industry to open, market-unifying architectures and interoperability,
> which reduce complexity and cost for our customers.  With this move, we
will
> change the basis of competition in the industry."
> Under the terms of the agreement, unanimously approved by both Boards of
> Directors, Compaq shareowners will receive 0.6325 of a newly issued HP
share
> for each share of Compaq, giving the merger a current value of
approximately
> $25 billion.  HP shareowners will own approximately 64% and Compaq
> shareowners 36% of the merged company.  The transaction, which is expected
> to be tax-free to shareowners of both companies for U.S. federal income
tax
> purposes, will be accounted for as a purchase.
> The transaction is expected to be substantially accretive to HP's pro
forma
> earnings per share in the first full year of combined operations based on
> achieving planned cost synergies.  Cost synergies of approximately $2.0
> billion are expected in fiscal 2003, the first full year of combined
> operations.  Fully realized synergies are expected to reach a run rate of
> approximately $2.5 billion by mid-fiscal 2004.  These anticipated
synergies
> result from product rationalization; efficiencies in administration,
> procurement, manufacturing and marketing; and savings from improved direct
> distribution of PCs and servers.  Subject to regulatory and shareowner
> approvals and customary closing conditions, the transaction is expected to
> close in the first half of 2002.  In connection with the transaction, both
> companies have adopted shareowner rights plans; information on these plans
> will be filed today with the Securities and Exchange Commission.
> The merged entity will be headquartered in Palo Alto and retain a
> significant presence in Houston, which will be a key strategic center of
> engineering excellence and product development.
> The new HP will be structured around four operating units that build on
the
> companies' similar go-to-market and product development structures to
> provide clear customer and competitive focus.   Leadership and estimated
> revenues (calculated by combining the two companies' trailing four
reported
> fiscal quarters) are as follows:
> *  A $20 billion Imaging & Printing franchise to be led by Vyomesh
> Joshi, currently President, Imaging and Printing Systems, of HP.
> *  A $29 billion Access Devices business to be led by Duane Zitzner,
> currently President, Computing Systems, of HP.
> *  A $23 billion IT Infrastructure business, encompassing servers,
> storage and software, to be led by Peter Blackmore, currently Executive
Vice
> President, Sales and Services, of Compaq.
> *  A $15 billion Services business with approximately 65,000
> employees in consulting, support and outsourcing to be led by Ann
Livermore,
> currently President, HP Services.
> The chief financial officer of the combined entity will be Robert Wayman,
> Chief Financial Officer of HP.  The integration team will be led by Webb
> McKinney, currently President of HP's Business Customer Organization, and
> Jeff Clarke, Chief Financial Officer of Compaq.
> Fiorina concluded, "Clearly, the potential of this combination is
> compelling, but we understand the magnitude of the challenge and the need
> for discipline and speed. We're helped by the fact that both companies
have
> been pursuing similar organizational structures and sales force models,
and
> there is immense talent resident in both organizations.  We have done
> comprehensive integration planning and have clear metrics to drive our
> success.  We are committed to achieving the synergies we have identified
> while maintaining our competitive position and momentum in the
marketplace."
>
>
> Investment Community and Media Event Information
> The companies will host a meeting for the investment community today at
9:00
> a.m. EDT at the Equitable Building in New York City, 787 Seventh Avenue
> (between 51st & 52nd streets) in the Auditorium, Lower Level.  Those
unable
> to attend may listen by calling (888) 849-9184 (US) or (212) 896-6074
> (international), using reservation number: 19649821. The event can also be
> accessed via webcast at www.hp.com <http://www.hp.com>  or www.compaq.com
> <http://www.compaq.com> .  The slides used for this presentation will be
> available on each company's website 10 minutes prior to the start of the
> event.  A replay will be available for 14 days following the meeting at
> (800) 633-8284 (US) or (858) 812-6440 (international), using reservation
> number: 19649821.
> There will also be a question and answer session for the media at 10:30
a.m.
> EDT following the analyst meeting, also in the Equitable Auditorium.
Those
> unable to attend may participate by calling (888) 754-3420 (US) or (212)
> 676-5416 (international), using reservation number: 19650338. The event
can
> also be accessed via webcast at www.hp.com <http://www.hp.com>  or
> www.compaq.com <http://www.compaq.com> .  A replay will be available for
14
> days following the meeting at (800) 633-8284 (US) or (858) 812-6440
> (international), using reservation number: 19650338.
>
> Fact Sheet
> A fact sheet related to the merger is attached to this press release.
>
> Calculation of Combined Revenues
> The statements of combined revenues in this release and the attached fact
> sheet are estimates and have been calculated by adding similar category
> information from the companies' separate filings with the Securities
> Exchange Commission for each of their past four fiscal quarters.  Because
> the companies have different fiscal year-ends, these estimates do not
track
> a matching time period.  The measurement method described above may result
> in amounts that differ from  amounts resulting from other methodologies
the
> companies may use in the future.
>
> About HP
> Hewlett-Packard Company -- a leading global provider of computing and
> imaging solutions and services -- is focused on making technology and its
> benefits accessible to all. HP had total revenue from continuing
operations
> of $48.8 billion in its 2000 fiscal year. Information about HP and its
> products can be found on the World Wide Web at www.hp.com.
>
> About Compaq
> Compaq Computer Corporation is a leading global provider of enterprise
> technology and solutions.  Compaq designs, develops, manufactures and
> markets hardware, software, solutions and services, including
> industry-leading enterprise storage and computing solutions,
fault-tolerant
> business-critical solutions, communication products, and desktop and
> portable personal computers that are sold in more than 200 countries.
> Information on Compaq and its products and services is available at
> www.compaq.com <http://www.compaq.com> .
>
> Additional Information and Where to Find It
> HP intends to file a registration statement on Form S-4 in connection with
> the transaction, and HP and Compaq intend to mail a joint proxy
> statement/prospectus to their respective stockholders in connection with
the
> transaction.  Investors and security holders of HP and Compaq are urged to
> read the joint proxy statement/prospectus when it becomes available
because
> it will contain important information about HP, Compaq and the
transaction.
> Investors and security holders may obtain a free copy of the joint proxy
> statement/prospectus (when it is available) at the SEC's web site at
> www.sec.gov <http://www.sec.gov> .  A free copy of the joint proxy
> statement/prospectus may also be obtained from HP or Compaq.  HP and its
> executive officers and directors may be deemed to be participants in the
> solicitation of proxies from the stockholders of HP and Compaq in favor of
> the transaction.  Information regarding the interests of HP's officers and
> directors in the transaction will be included in the joint proxy
> statement/prospectus.   Compaq and its executive officers and directors
may
> be deemed to be participants in the solicitation of proxies from the
> stockholders of HP and Compaq in favor of the transaction.  Information
> regarding the interests of Compaq's officers and directors in the
> transaction will be included in the joint proxy statement/prospectus. In
> addition to the registration statement on form S-4 to be filed by HP in
> connection with the transaction, and the joint proxy statement/prospectus
to
> be mailed to the stockholders of HP and Compaq in connection with the
> transaction, each of HP and Compaq file annual, quarterly and special
> reports, proxy and information statements, and other information with the
> SEC.  Investors may read and copy any of these reports, statements and
other
> information at the SEC's public reference rooms located at 450 5th Street,
> N.W., Washington, D.C., 20549, or any of the SEC's other public reference
> rooms located in New York and Chicago.  Investors should call the SEC at
> 1-800-SEC-0330 for further information on these public reference rooms.
The
> reports, statements and other information filed by HP and Compaq with the
> SEC are also available for free at the SEC's web site at www.sec.gov
> <http://www.sec.gov> .  A free copy of these reports, statements and other
> information may also be obtained from HP or Compaq.
>
> Forward Looking Statement
> This news release and the attached fact sheet contain forward-looking
> statements that involve risks, uncertainties and assumptions. All
statements
> other than statements of historical fact are statements that could be
deemed
> forward-looking statements. For example, statements of expected synergies,
> accretion, timing of closing, industry ranking, execution of integration
> plans and management and organizational structure are all forward-looking
> statements.  Risks, uncertainties and assumptions include the possibility
> that the market for the sale of certain products and services may not
> develop as expected; that development of these products and services may
not
> proceed as planned; that the transaction does not close or that the
> companies may be required to modify aspects of the transaction to achieve
> regulatory approval; or that prior to the closing of the proposed merger,
> the businesses of the companies suffer due to uncertainty; that the
parties
> are unable to transition customers, successfully execute their integration
> strategies, or achieve planned synergies; other risks that are described
> from time to time in HP's Securities and Exchange Commission reports
> (including but not limited to the annual report on Form 10-K for the year
> ended Oct. 31, 2000, and subsequently filed reports); and other risks that
> are described from time to time in Compaq's Securities and Exchange
> Commission reports (including but not limited to the annual report on Form
> 10-K for the year ended December 31, 2000, and subsequently filed
reports).
> If any of these risks or uncertainties materializes or any of these
> assumptions proves incorrect, HP's and Compaq's results could differ
> materially from HP's and Compaq's expectations in these statements. HP and
> Compaq assume no obligation and do not intend to update these
> forward-looking statements.
>
> Contacts
> For HP:
> Rebecca Robboy, 650-857-2064
> Suzette Stephens, 650-236-5127
>
>
> For Compaq:
> Arch Currid, 281-414-6919
>