A US court has cleared the way for Hewlett-Packard $18 billion purchase of personal computer maker Compaq, quashing an attempt by dissident shareholder Walter Hewlett to block the deal.
Mr Hewlett conceded defeat just hours after the ruling, allowing HP to close the deal in a week as planned. In his concession he promised to smooth the integration of the computer industry's largest-ever merger - one which he had fought for six months.
Earlier Delaware Chancery Court Judge William Chandler had upheld HP's March 19th shareholder vote and cleared chief executive Ms Carly Fiorina of wrongdoing.
Judge Chandler also rejected Mr Hewlett's claims that HP management lied to shareholders about financial projections and bought votes from a key investor on the eve of the merger vote.
"Members of HP's senior management testified credibly, in accordance with the evidence and without exception," Judge Chandler wrote in the decision.
Mr Hewlett, who was ousted as an HP director last week, leaving the company without a member of the Hewlett or Packard families on its board for the first time in its 63-year history, said in a statement that he would not appeal the ruling and would let the March 19th merger vote tally be certified.
"I will therefore now do everything possible to support the successful implementation of HP's acquisition of Compaq and encourage others who have shared my views in the past several months to do the same," he said.
"Clearly we are gratified and it is time we had the opportunity to move on," HP spokeswoman Ms Rebeca Robboy said in response.
Ms Fiorina argues the merger will create a global computer powerhouse in a consolidating industry, while Hewlett called the deal a multibillion dollar mistake that would saddle HP with a huge low-profit personal computer business rather than enhance its high-end computing and printer businesses.
HP plans to join the two companies on May 7th, beginning a long integration process that Fiorina called the toughest part of the merger, when she announced her plan in September. Many HP employees opposed the plan, and 15,000 workers - about 10 percent of the new company - will lose their jobs.
Ms Fiorina will continue her quest to shake up the company, the main reason she was brought in three years ago as the first outsider to head HP, which saw its early model of community-oriented decision making tarnished in later years by a reputation for bureaucracy and entitlement.
"You've got to change people," said Martin Reynolds, an analyst at technology research firm Gartner Inc. "That's their biggest challenge - it is maintaining morale and the engagement of the employees over the next year."
Shares of HP in after-hours trade on Instinet fell to $16.86 after the Hewlett concession down from a close of $17.10 on the New York Stock Exchange. Shares Compaq were up to $10.50 from their close at $10.15.