HP-Compaq to run antitrust gantlet
Due to the problems they will face integrating such diverse services and product I don"t think the merger will go through, but if it does...
The merger between Hewlett-Packard and Compaq Computer is expected to go through stiff regulatory review, with regulators taking an especially close look at PC distribution, say legal specialists.
If there are stumbling blocks, they could be the new entity"s near lock on PC distribution in Europe and the possibility that the merger might prompt consolidation among suppliers, distributors and dealers in the United States.
On Thursday, the American Antitrust Insitute raised concerns that the proposed merger would "lessen competition in a number of ways" and called on the government to intervene. Among other things, AAI contends that both companies are responding to a short-term sales slump by taking drastic measures that would weaken competition.
"From a national perspective, a permanent loss of competition is not an appropriate solution for what appears to be a temporary economic problem," AAI said.
The two companies must convince the Justice Department or the Federal Trade Commission in the United States, as well as the European Union"s Competition Commission, that the merger is justified and poses no anticompetitive threat.