Potential $1.4bn price tag on HP-Compaq deal

NEWS Hewlett-Packard has revealed what it reckons the cost of its merger with Compaq would be. In a presentation to Wall Street analysts HP CFO Bob Wayman forecast $450m to $700m in restructuring costs and the same range of charges for purchase accounting and righting off goodwill. That means HP figures on a total charge of between $900m and $1.4bn as the price for doing the deal. HP has said in immediate post-merger years it would save more than this amount because of synergies between the two companies' operations. However, detractors - including the vocal Walter Hewlett, son of one HP co-founder - have put potential merger costs at anything up to $3bn. There have also been concerns over rewards senior management on both sides of the deal will receive should it get the green light.