• silicon.com
• Technology
• Hardware

By Sonya Rabbitte, 7 March 2002 15:05

NEWS The US Federal Trade Commission has voted unanimously in favour of the HP-Compaq merger claiming it will not adversely affect competition. The result means HP will not be required to spin off any of its divisions on anti-competitive grounds. The FTC approval was seen as the last major hurdle for the proposed merger, excluding the shareholder vote, after the EU gave it the go-ahead last month. This latest boost to the deal comes just a day after Institutional Shareholder Services endorsed the deal. The FTC said it had been particularly concerned about the impact the merger could have on the markets for high-end servers, software and services rather than consumer technologies. But it said it was confident a combined HP-Compaq would not damage competition and could lead to more market innovation. In a statement, HP said: "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." Michael Capellas, CEO of Compaq, said: "The FTC approval is another step forward in making this merger a reality." HP competitors Dell, IBM and Sun Microsystems did not voice any concerns following the result. However, in a statement, Walter Hewlett said rivals were not concerned because they do not see a merged company as an increased threat. "We believe HP shareholders should be concerned when competitors don't object to a transaction that is supposed to add value to HP," he said. If shareholders approve the deal, the two companies will begin combined operations by April with Capellas as CEO.