HP-Compaq Merger Clears FTC


The U.S. Federal Trade Commission has granted its approval for the proposed merger between Hewlett-Packard and Compaq, clearing the last regulatory hurdle for the deal.

Last month, the European Commission approved the pact, which is scheduled for a vote by HP shareholders on March 19 and Compaq shareholders on March 20.

While the FTC approval was expected, it comes just a day after proxy firm Institutional Shareholder Services recommended that its clients vote for the merger.

"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," said Carly Fiorina, HP chairman and chief executive officer, in a statement.

"Completion of the FTC review marks a major milestone in the approval process, and we are now focused on winning the shareowner vote," she said.

Most analysts peg that vote as a toss-up. With roughly 20 percent of the outstanding shares, including blocks controlled by the Hewlett and Packard family foundations, aligned against the deal, about 60 percent of HP's institutional shareholders will have to vote for the merger in order to win passage.