The European Commission last night gave approval for the merger of Hewlett Packard (HP) and Compaq saying that it would not negatively impact competition in Europe.
As expected, the Commission decided against a four-month extended investigation into the merger, stating that "HP would not be in a position to increase prices and that consumers would continue to benefit from sufficient choice and innovation".
HP chief executive Carly Fiorina said that she was "extremely pleased" with the decision.
"Today's announcement confirms that the deal does not raise competition concerns in Europe, and we see it as an encouraging step in the continuing process of satisfying regulators worldwide that this deal will provide a real stimulus for competition in IT markets," Fiorina said in a statement.
Industry players offered a cautious welcome. Guy Hains, chief executive of Computer Sciences, said that the Commission's approval was one of the smaller hurdles the deal had to overcome, leaving at least two years' work to harmonise IT infrastructure.
"If handled correctly, I believe HP/Compaq will emerge the winners in what has been an extremely hostile process. If not, many people's initial opinions on the feasibility of such a mammoth merger will be proved right," he said.
The deal now hinges on a shareholder vote to be held in March, which could prove a tougher test with both founders' sons against the merger.
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