Hewlett-Packard's HP-Compaq Merger Fact Sheet

Transaction Summary

Structure:Stock-for-stock merger

Exchange Ratio:0.6325 of an HP share per Compaq share

Current Value:Approximately $25 billion

Ownership:HP shareholders 64%; Compaq shareholders 36%

Accounting:Purchase

Expected Closing:First half of 2002

Overview

Creates an $87 billion global technology leader, with the industry's most complete set of IT products and services for both businesses and consumers.
New HP would be the #1 global player in servers, imaging and printing, and access devices (PCs and hand-helds), as well as Top 3 player in IT services, storage and management software.
The combination furthers each company's commitment to open, market-unifying systems and architectures and aggressive direct and channel distribution models.
Combined company can create substantial shareowner value through significant cost structure improvements and access to new growth opportunities.
Transaction expected to be substantially accretive to pro forma EPS in first full year of combined operations.
The merger is expected to generate cost synergies of approximately $2.0 billion in fiscal 2003, the first full year of operations; fully realized synergies are expected to reach a run rate of approximately $2.5 billion by mid-fiscal 2004.
New HP would have operations in more than 160 countries and over 145,000 employees.
Key Facts

(last 4 qtrs):	HP	Compaq	Pro Forma Combined
Total Revenues	$47.0 billion	$40.4 billion	$87.4 billion
Assets	$32.4 billion	$23.9 billion	$56.4 billion
Operating	Earnings	$2.1 billion	$1.9 billion	$3.9 billion