Hewlett-Packard To Buy Compaq

September 4, 2001

U.S. computer maker Hewlett-Packard says it will buy rival Compaq Computer Corporation in a deal aimed at bolstering both companies' sagging profits. A joint statement issued late Monday said Hewlett-Packard will pay $25 billion in stock.

The deal would create a computer giant that would rival industry leader IBM.

In the past year Hewlett-Packard reported revenues of $47 billion, while Compaq had revenues of $40 billion. The combined amount is only slightly less than IBM's $90 billion in revenues.

The deal comes as the computer industry is suffering through a downturn that has seen sales shrink considerably. Both Hewlett-Packard and Compaq have experienced a plunge in revenues and have announced massive layoffs.

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