FTC Gives HP, Compaq Merger 'OK'

The Federal Trade Commission on Wednesday ruled that a merger of Hewlett-Packard and Compaq would not necessarily raise antitrust concerns and gave the companies a green light to move forward. The merger of the computer heavyweights was first announced last September in a landmark deal initially valued at over $20 billion.

"The Commission conducted an extensive investigation of the merger's effect on competition in markets for personal computers, servers, and microprocessors, among other products," the FTC said. "Based on that investigation, the Commission did not find reason to believe that the proposed transaction would impair competition in any relevant market."

"We are gratified by the FTC's decision. It validates our conviction from the outset that the merger can only enhance competition throughout our markets," HP Chairman and CEO Carly Fiorina said in a statement. "Completion of the FTC review marks a major milestone in the approval process, and we are now focused on winning the shareowner vote."

The merger has proved an uphill battle for those involved, as many shareholders, including HP board member Walter Hewlett, vehemently oppose the deal. The merger will be put to a final vote on March 19 in a special meeting of HP shareowners and March 20 for Compaq shareowners. If approved, the companies are expected to complete the merger in early April.