Hewlett-Packard's HP-Compaq Merger Fact Sheet

Transaction Summary

Structure:Stock-for-stock merger

Exchange Ratio:0.6325 of an HP share per Compaq share

Current Value:Approximately $25 billion

Ownership:HP shareholders 64%; Compaq shareholders 36%

Accounting:Purchase

Expected Closing:First half of 2002

Overview

• Creates an $87 billion global technology leader, with the industry's most complete set of IT products and services for both businesses and consumers.
• New HP would be the #1 global player in servers, imaging and printing, and access devices (PCs and hand-helds), as well as Top 3 player in IT services, storage and management software.
• The combination furthers each company's commitment to open, market-unifying systems and architectures and aggressive direct and channel distribution models.
• Combined company can create substantial shareowner value through significant cost structure improvements and access to new growth opportunities.
• Transaction expected to be substantially accretive to pro forma EPS in first full year of combined operations.
• The merger is expected to generate cost synergies of approximately $2.0 billion in fiscal 2003, the first full year of operations; fully realized synergies are expected to reach a run rate of approximately $2.5 billion by mid-fiscal 2004.
• New HP would have operations in more than 160 countries and over 145,000 employees.
• Key Facts

• Leadership
• Board of Directors: 5 Compaq directors to join HP Board
• Chairman and Chief Executive Officer: Carly Fiorina
• President: Michael Capellas
• Chief Financial Officer: Robert Wayman
• Imaging and Printing: Vyomesh Joshi
• Access Devices: Duane Zitzner
• IT Infrastructure: Peter Blackmore
• Services: Ann Livermore