Hewlett/Packard's proposed acquisition of Compaq Computer passed a
regulatory hurdle yesterday (6 March) when the US Federal Trade
Commission (FTC) concluded its review of the deal.
As shareholders and company executives continued to exchange jabs
over the proposal, the FTC voted unanimously to close its
investigation into the acquisition without demanding any changes to
the terms of the proposed deal. The agency, which monitors market
competition, said it "did not find reason to believe that the
proposed transaction would impair competition in any relevant
market".
The FTC is the latest government agency to give HP a thumbs-up in
its effort to acquire Compaq. The European Union cleared the deal
on 31 January. A month earlier, the Canadian Competition Bureau
completed its review of the proposed buyout, finding no issues of
competitive concern.
While HP executives continue to promote the acquisition as a
benefit to customers and the computer industry, the heirs of
company founders William Hewlett and David Packard, who hold
roughly 18% of the company's shares through individual ownership
and family trusts, have come out against the proposed buyout.
Walter Hewlett, a company board member and son of William Hewlett,
has been the most vocal opponent of the deal, launching an
aggressive media campaign.
Yesterday, Institutional Shareholder Services (ISS), an influential
investment group, threw its support behind the acquisition. ISS
advises some of HP's largest shareholders, and its support could
swing votes in favour of the deal. For example, Barclays Bank has
said it will vote its 3.1% stake in line with ISS' recommendation.
HP shareholders are expected to vote on the deal at a meeting on 19
March. For the deal to go through will also require the approval of
Compaq shareholders, who will vote at a separate meeting a day
later.