Republican presidential candidate Carly Fiorina said Thursday that the Hewlett Packard/Compaq merger she engineered as HP’s CEO in 2001 has “been described as the most successful merger in high-tech history,” but there are plenty who say exactly the opposite.
Fiorina was on MSNBC’s “Morning Joe” when she took a question from Yahoo news and finance anchor Bianna Golodryga.
“You scored a lot of points yesterday by honing in on phony capitalism and focusing on the mergers that we’re seeing between large companies across the board that’s really, in your opinion, disturbing the smaller companies that are still trying to stay afloat,” Golodryga said. “We’re seeing a potential merger at Pfizer, we see health care mergers left, right, and center. Looking back though, you know, people talk about your record at HP and the merger with Compaq. Do you regret that merger now?”
“No, not at all,” Fiorina replied. “That was a highly successful merger. It’s been described as the most successful merger in high-tech history. It was.”
Even before Fiorina was fired by HP’s board in 2005, Fortune did a cover story on “Why Carly’s Big Bet is Failing.”
“Beneath the public image are the yardsticks against which executives are — and should be — measured. So it is right to ask whether this whirlwind has succeeded. And inevitably that question must be answered in two parts. First, under the only lens that matters, did the famed merger that Fiorina engineered between HP and Compaq produce value for HP’s shareholders? Second, with that merger nearly three years past, is HP in shape to thrive in its brutally competitive world?
“The answers are no and doubtful.”
CIO in 2011 listed the HP/Compaq merger in its article “Match Made in Hell: 7 Worst Tech Mergers and Acquisitions.”
“The merger made HP more narrow and shareholders and Wall Street did not like it. After the deal, HP’s share price dropped by a quarter,” the article said. “In 2005, CEO Carly Fiorina was forced to step down with shares at half the price they’d been when she started in 1999. The Compaq deal is seen as the genesis of Fiorina’s troubles.”
Tom’s IT Pro in 2013 listed the HP/Compaq merger as one of the “13 Worst Tech Industry Mergers and Acquisitions.”
“The ‘surprising success’ attributed to the merger of the company most responsible for the growth and success of the personal computer industry, with HP, is perhaps on account of a heartening realization that nobody died.
“It would be both unfair and incorrect to say that neither party to the most spectacularly celebrated merger failure in tech history did not see the culture clash coming (I count AOL + Time Warner as a media merger). Indeed, HP under then-CEO Carly Fiorina performed extensive due diligence in investigating the various cultures of competence in both companies. The thing is, its investigation used HP’s classic scientific methods, which may be as thorough yet as effective as an IRS audit of the IRS.”
And ZDNet just last week listed the HP/Compaq merger among its “worst mergers and acquisitions in tech history.”
“Under Carly Fiorina’s reign, the merged ‘New’ HP lost half of its market value and the company incurred heavy job losses. Fiorina stepped down in 2005.
“Since the Compaq merger, HP has endured numerous problems with failed initiatives, dubious acquisitions (3COM, EDS, Palm, Autonomy) and has been plagued with ineffective management, including two major ethics scandals that have forced Chairwoman Patricia Dunn and two CEOs in succession, Mark Hurd and Leo Apotheker to resign.”
“On August 1, 2015, HP split into two companies — HP Enterprise, which is keeping the servers, storage, services and software businesses, and HP Inc., which will sell PCs, printers and other consumer products.”