March 28, 2002 7:10 AM PST
HP, Compaq prep post-merger details
HP and Compaq also plan to tell workers more about how the merged company's leadership will be structured.
"Putting anything on hold while we wait for a final proxy vote tabulation is simply not an option," HP CEO Carly Fiorina and Compaq CEO Michael Capellas said Wednesday in a letter to employees. "Therefore, we will continue to move forward aggressively with the integration and launch planning, so we can hit the ground running shortly after the legal close."
Workers will also learn next week how executives plan to decide who will keep their jobs. The companies have said they plan to cut 15,000 jobs shortly after the deal is completed.
HP claimed victory shortly after its shareholder meeting March 19, although dissident board member Walter Hewlett refused to concede. HP said Wednesday that it would announce the final results as soon as it learns of them, but the company said the tabulation may yet take a few weeks. Compaq shareholders approved the deal by a wide margin a day after the HP vote.
Executives on the integration team said Tuesday that they now hope the deal will close in either April or May.
In Wednesday's letter to employees, Fiorina and Capellas also said that HP received a majority of shares voted by HP employees as part of employee stock-purchase programs. Both sides have been claiming support from employees, in surveys as well as through select disclosure of how employees in various plans voted.
On the eve of the HP shareholder vote, Hewlett claimed that 72 percent of HP and Agilent Technologies employees and retirees who held shares in two retirement plans had voted against the deal.
As for HP's current employees, the two chief executives said workers must continue to act as members of separate companies before the closure of the deal, but HP will continue to announce details of how the combined company will operate.
Although the companies have been resolutely upbeat about their business performance during the transition, there have been indications of unsteadiness in the transition. The Wall Street Journal in Thursday's online edition said internal documents show that in HP's business-customer organization, sales of computer-related hardware last month were 19 percent below those of the year-earlier period. That resulted in an operating loss in February for the unit's computer-hardware segment of $108.3 million, a drop of nearly 68 percent year over year, the paper said.
The companies said in September who the top leaders of the combined company would be. Next week, HP will announce the next layer of management--that is, those who will report directly to the already announced leaders.
"Next week we will communicate the details of the selection process that we are using to fill jobs in the new company--including an overview of the process, guiding principles and a broad timeline," Fiorina and Capellas said. "This process will, of course, be subject to local country legal requirements."
The two leaders also warned of the challenges the combined HP will face as it seeks to become a single company.
"We will try to do everything we can to minimize disruptions over the next several months," the leaders wrote. "However, please keep in mind that we will be working to successfully implement what is arguably the most important merger in the history of the technology industry. It is a complex undertaking and we may stumble occasionally."