History should teach us that merger math simply does not add up like
standard arithmetic. FWIW, here are a few examples :

- 1989, HP + Apollo : 1+ 1 = 1.5 - HP lost lots of market share in
workstations to archrival SUN.
- 1994, HP + TI, Multi-user systems division : 1 + 1 = 1.0001 - MU TI
drowned into HP's Unix stuff
- 1996 (I think ...), HP + Convex : 1 + 1 = 1.1 - HP more or less inherited
the V-Class and that's about it.

How can we expect HP + Compaq to add up to 2, or more ? Besides, IMHO, it's
hard to justify a $25bn merger by $2.5bn in overhead cost savings. Thats a
10-year ROI !!!! Would any sensible shareholder wait for 10 years ? From
what I've seen here and there, shareholder patience thresholds are measured
in weeks, not in years.

In other words, whatever the industrial synergies, which may or may not be
true but are essentially irrelevant as shareholders' patience is concerned,
it's my guess that the merger won't happen.

Christian Lheureux
Responsable du Département Systèmes et Réseaux / Head of Systems and
Networks Department
APPIC R.H.
business partner hp invent
Tel : +33-1-69-80-97-22   /   Fax : +33-1-69-80-97-14 / e-mail :
[log in to unmask]
"Le Groupe APPIC recrute, contactez nous !"



> -----Message d'origine-----
> De : HP-3000 Systems Discussion [mailto:[log in to unmask]]De la
> part de John McNulty
> Envoyé : samedi 8 décembre 2001 20:47
> À : [log in to unmask]
> Objet : Re: [HP3000-L] Tru64.org Flash Poll on Merger "Pearl
> Harbor Day"
>
>
> I find the words of the press release issued in response to
> this, quite
> amazing:
>
>   "We are disappointed by the Packard Foundation's
> preliminary decision.
>    Nevertheless, our responsibility to shareowners, customers
> and employees
>    requires that we maintain a pragmatic view of the business
> and a focus on
>    the future. Our firm commitment to this merger stems from
> our conviction
>    that it will deliver the industry leadership and earnings
> growth our
>    shareowners expect and our employees deserve."
>
> If they were really concerned about responsibility to
> shareowners, customers
> and employees, they would have canned the deal already.
> From the Compaq
> side the customers will face a slow death of their favourite
> technologies, the
> employees face massive redundancies, and the shareholders
> have watched their
> investments get wiped out.   It can't look much better from
> the HP side of the
> fence either, with big redundancies in the PC and handheld
> divisions a real
> possibility, and years of corporate indigestion to follow
> from swallowing the
> Compaq elephant.
>
> When Compaq took over Digital, the grand announcement was
> that the two would
> compine to create a company that could generate $50 billion
> in revenue.   What
> history had shown us is that in mergers like this, the two
> end up being much
> less than the sum of their parts.
>
> I think the Hewlett and Packard foundations have judged this
> right.  This deal
> should go the way of the Dodo.
>
> John
>
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