Analysis of Merger Between Hp and Compaq
Contents
Abstract 1
Key words: merger HP Compaq synergy 1
1.Introduction of the case 1
1.1 The Hewlett-Packard Company 1
1.2 The Compaq Company 2
1.3 Motives 2
1.3.1 Strategic motives 2
1.3.2 Financial motives 3
Operating Synergy (mainly from cost savings) 3
Contribution Margin 3
2.HP’s Concerns 4
2.1 Business portfolio 4
2.2 Strategic problems 4
2.3 Financial impacts 4
2.4 Integration risk 5
3.Analysis and solutions 5
3.1 Stand-alone valuation 5
3.2 Synergy valuation 6
3.3 Premium valuation 8
3.4 Valuation range 9
4.Conclusion 9
Proscripts 10
Appendix 10
References 10
Abstract Hewlett-Packard Company is asking its shareholders to vote for its decision to acquire Compaq Company to achieve strategic benefits as well as financial benefits in the long run. But there are many concerns and problems with merger. We will provide the readers with an analysis of the projected strategic plan and valuation of synergy to prove that the deal so far is a good one. More detailed information is needed to further come up with a sound decision.
Key words: merger HP Compaq synergy
1.Introduction of the case 1.1 The Hewlett-Packard Company Hewlett-Packard Company or HP is an American multinational information technology corporation headquartered in Palo Alto, California, United States. It provides products, technologies, software, solutions and services to consumers, small- and medium-sized businesses (SMBs) and large enterprises, including customers in the government, health and education sectors. The company was founded in a one-car garage in Palo Alto by William (Bill) Redington Hewlett and Dave Packard. HP had been the world's leading PC manufacturer. It specializes in developing and manufacturing computing, data storage, and networking hardware, designing software and delivering services. Major product lines include personal computing devices, enterprise, and industry standard servers, related storage devices, networking products,
Abstract 1
Key words: merger HP Compaq synergy 1
1.Introduction of the case 1
1.1 The Hewlett-Packard Company 1
1.2 The Compaq Company 2
1.3 Motives 2
1.3.1 Strategic motives 2
1.3.2 Financial motives 3
Operating Synergy (mainly from cost savings) 3
Contribution Margin 3
2.HP’s Concerns 4
2.1 Business portfolio 4
2.2 Strategic problems 4
2.3 Financial impacts 4
2.4 Integration risk 5
3.Analysis and solutions 5
3.1 Stand-alone valuation 5
3.2 Synergy valuation 6
3.3 Premium valuation 8
3.4 Valuation range 9
4.Conclusion 9
Proscripts 10
Appendix 10
References 10
Abstract Hewlett-Packard Company is asking its shareholders to vote for its decision to acquire Compaq Company to achieve strategic benefits as well as financial benefits in the long run. But there are many concerns and problems with merger. We will provide the readers with an analysis of the projected strategic plan and valuation of synergy to prove that the deal so far is a good one. More detailed information is needed to further come up with a sound decision.
Key words: merger HP Compaq synergy
1.Introduction of the case 1.1 The Hewlett-Packard Company Hewlett-Packard Company or HP is an American multinational information technology corporation headquartered in Palo Alto, California, United States. It provides products, technologies, software, solutions and services to consumers, small- and medium-sized businesses (SMBs) and large enterprises, including customers in the government, health and education sectors. The company was founded in a one-car garage in Palo Alto by William (Bill) Redington Hewlett and Dave Packard. HP had been the world's leading PC manufacturer. It specializes in developing and manufacturing computing, data storage, and networking hardware, designing software and delivering services. Major product lines include personal computing devices, enterprise, and industry standard servers, related storage devices, networking products,
References: The Merger of Hewlett-Packard And Compaq (A): Strategy And Valuation, UVA-F-1450, Rev.Nov.19,2009 2.http://papers.ssrn.com/sol3/papers.cfm?abstract_id=909888, Robert F.Bruner, Anna D.Buchanan