Compaq-DEC deal gets green light

The Federal Trade Commission has effectively cleared the way for the $9.6 billion merger between Compaq Computer and Digital Equipment.

The government agency announced today that it has closed its review of Compaq's pending acquisition of Digital, and that the waiting period has been terminated.

The transaction is now subject to approval by holders of two-thirds of Digital's common stock. A special meeting of the company's shareholders will be held at 11 a.m. on June 11 at the Westford Regency Inn in Westford, Massachusetts, and shareholders of record as of May 4 will be entitled to vote.

Subject to shareholder approval and satisfaction of other customary conditions, Compaq and Digital expect the transaction to close shortly after the special meeting.

Compaq disclosed in a filing with the Securities and Exchange Commission early last month that the restructuring charge it will incur as a result of the megamerger will fall between $1.5 billion and $2 billion, and will include workforce reductions that some analysts estimate will affect at least 10,000 employees. That would represent between 19 percent and 27 percent of Digital's workforce of 54,000.

In March, the European Commission's deadline to take action on the proposed merger expired. The commission's decision not to extend the deadline effectively closed its investigation.