Hewlett-Packard (HP) is expected to win approval from the European Commission for its plan to buy Compaq Computer in a $25 billion deal, an EU source said today.
The source said the commission would not impose conditions on the transaction. An HP spokeswoman had no immediate comment.
The deal is an important test of antitrust relations between the EU and the United States. In a controversial move, the European Commission last year blocked General Electric's planned $42 billion purchase of Honeywell, prompting US criticism.
It was the first time that European regulators had killed a merger approved by their US counterparts. The US Federal Trade Commission has yet to rule on the HP/Compaq deal.
But regulatory clearance is not the only hurdle the deal faces. The shareholder vote on what would be the largest merger in personal computer history is due in early March, with the outcome far from certain.
HP chief executive Ms Carly Fiorina has had a tough battle selling the merger, announced on September 4th, after members of both the Hewlett and Packard founding families said in December they planned to vote against the deal.
HP board member Mr Walter Hewlett and other critics say that purchasing Compaq would dilute the value of the company's well-known imaging franchise - printers and fax machines - and saddle it with a big PC division when a focus on the development of high-end machines was needed.
Ms Fiorina has said the deal is the next, necessary step for the firm. "To remain static is to lose ground," she said.