HP spent a hefty $4.5bn to buy Mercury Interactive, a maker of application testing and network management software.

The printer giant pays a premium of more than 30 per cent over Mercury's current stock price. That's too expensive if you consider that Mercury's image is tainted after its former chief executive was caught back-dating his stock options in an effort to make himself a few more bucks.

26 Jul 2006

Stock market scandals aren't just bad for the corporate image, it will also result in an exodus of talent. Allow that to go on long enough and all that's left is a empty skeleton.

HP chief executive Mark Hurd however stressed that he's confident that there are no more skeletons hidden in Mercury's closet.

The acquisition furthermore could signal the end of the old "Compaq vs. HP" stories. Nothing helps forge a team like a common new enemy.

HP engaging in its first multi billion dollar acquisition since 2001 signals a willingness to move on. Time will tell if the company is ready to do so.

Mark Hurd goes on a buying spree

Tags: HP, mercury interactive, compaq