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With 68 percent of the vote in, Compaq's chief executive officer and chairman, Michael Capellas, said that merger had been approved by a nine-to-one margin.
"Over the past several months, there has been a groundswell of support from customers, partners and shareholders who are favourable toward the merger as they examine its strategic rationale," said Capellas in a statement. "I am gratified that Compaq shareholders have seen the power behind the merger of these two great technology companies and given the board of directors and management their resounding support."
However, Capellas did acknowledge that the vote by shareholders in Hewlett Packard (HP) was so close that it would take weeks to validate. On Tuesday, HP's chief executive, Carly Fiorina, said that preliminary results had shown a "slim but sufficient" majority in favour of its USD20 billion bid for Compaq.
Fiorina has though been accused in some quarters of jumping the gun. This is because the counting of the over one billion outstanding votes is expected to take at least another couple of weeks. Dissident director, Walter Hewlett, who had led the fight against the acquisition, has said that the vote is too close to call and has refused to concede defeat.
Although Fiorina and Capellas claim otherwise, most analysts see the HP/Compaq deal as an attempt by the two companies to avoid falling even further behind IBM and being surpassed by the likes of Dell, Sun Microsystems and EMC.
Compaq overtook IBM as the world's biggest PC maker in the 1990s, however, last year its sales fell by 21 percent to USD33.5 billion and it was replaced in the top spot by Dell.
On the other hand, Fiorina and Capellas, who will become chief executive and president respectively of the merged entity, say that they will create a company with the scale and scope to take on IBM, and to become the market leader in the enterprise and consumer sectors.
Barry Dixon, technology analyst with Davy Stockbrokers, told ElectricNews that he regarded the merger as a defensive move by the two businesses and that it could be the first of several mergers between the main IT players if the technology market continues to be weak.
"The first stage of rationalisation within a business is to try and cuts costs by shedding jobs, which both HP and Compaq have done. However, you then reach a stage where to reduce costs further will permanently damage the company. When that happens you end up merging so you can save costs by getting rid of common functions," remarked Dixon.
If the merger does go ahead, it is expected that around 15,000 workers will be let go, which will leave the new company with a workforce of around 135,000. The two companies employ around 2,000 each in Ireland, but, according to Dixon, lay-offs will not be severe in their Irish operations.
"The companies don't have much cross-over in their operations here with Compaq concentrating on services and HP on manufacturing. As such, I think job cuts in Ireland will be relatively limited," he commented.
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