DOJ silence to HP means EDS merger can proceed
The house that Ross Perot built, after he left IBM in 1962, will apparently face no opposition in being absorbed into Hewlett-Packard's services division, as the DOJ's silence can be interpreted as acquiescence.
No news is good news: Hewlett-Packard Co. said yesterday that it had not received any requests for additional information from the US Department of Justice or the Federal Trade Commission regarding its May 13 acquisition of Electronic Data Systems Corp., which clears the way for the acquisition to proceed.
Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, with mergers and acquisitions over a certain size, both companies are required to file a "Notification and Report Form" describing the transaction with the Federal Trade Commission and the Assistant Attorney General in charge of the Antitrust Division of the Department of Justice. This is typically followed by a 30-day waiting period, though the companies involved may request "early termination," or a shortening of that period -- which neither HP nor EDS appeared to do -- and regulators may also request additional time -- which also did not appear to happen.
During that time, the regulatory agencies may request further information to help them determine whether the proposed transaction violates antitrust laws in the United States.
Because no regulatory agency either requested additional information or additional time, the companies can proceed with the transaction, which still requires EDS stockholder approval and regulatory clearance from the European Commission, HP said. Neither agency issued an opinion on the acquisition. HP had said on May 13 that it planned to buy technology services giant EDS for $13.9 billion, or $25 per share, doubling its services business to $38 billion and putting it in a better position to compete with IBM in the services space.
EDS of Plano, Texas, was founded in 1962 by Ross Perot. General Motors acquired the company in 1984, and spun it off again as an independent company in 1996. It is considered to be the seminal company in the outsourcing business.