540 team paper Essay Example | Topics and Well Written Essays - 750 words

540 team paper - Essay Example That is, when both the companies announced their plans to merge, the financial issue that impeded the progress of the actualization of merger is the view, that, large stock transactions between HP and Compaq appear to be statistically more risky. So, immediately after the announcement, â€Å"H-Ps stock closed at $18.87, down sharply from $23.21 the previous trading day. On May 3, 2002, when the deal was officially consummated, the stock ended the day at $17.44† (Knowledge@Wharton, 2004). But, this skepticism and the initial problems were overcome by the HP management by looking at the positive aspects of the merger. That is, the HP management wished that through large stock transactions (which were considered risky in the first place), HP will be able to â€Å"achieve annual cost savings of $2.5 billion, which will add $5 to $9 to each HP share; and at the same time will increase earnings per share by 13% during the first year following the merger† (cybermedia India Onl ine, 2003). This positive response or strategy worked in favor of the merger in 2002. So, the outcome of the company’s positive response to the financial issue, and the resultant merger, is HP was able to dominate the sector of desktops, laptops, and servers in various world markets. But, on the other side, even after the merger, there was opposition from the scions of HP founders. That is, both Walter Hewlett, son of HP founder William Hewlett and David Woodley Packard, son of co-founder David Packard opposed the merger for various reasons including the risks caused by large scale transactions. But, now the merged entity is functioning smoothly without any major hindrances. Like in the Lester scenario, in which the merger plans between Lester Electronics and Shwang-wa does not actualize due to the financial issues, the merger plans between French companies, Gaz de France and Suez O. K. also gets