HP to buy Compaq for $25 bn

NEW YORK: Computer giant Hewlett-Packard Co. will announce on Tuesday that it

is buying rival Compaq Computer Corp. for $25 billion in stock, The New York

Times reported on Monday evening, citing executives close to the

negotiations.

While an agreement had been reached in the acquisition, specific terms were

not disclosed, according to the newspaper. However, a premium is being offered

for Compaq's stock, The New York Times reported.

Carleton Fiorina, the chairman and chief executive of Palo Alto,

California-based Hewlett-Packard, will become the new company's chairman and

CEO, while Houston-based Compaq's chairman and CEO Michael D. Capellas will

become president of the new entity, according to the paper.

The newspaper said spokesmen for the two companies declined to comment.

On Friday, Compaq's shares closed at $12.35, down 34 cents from Thursday,

while Hewlett-Packard shares ended at $23.21, down 19 cents from Thursday's

close, both in trading on the New York Stock Exchange. The US stock market was

closed Monday in observance of the Labor Day holiday.

(C) Reuters Limited 2001.