BusinessCompany News£500m accounting bill in HP/Compaq merger

£500m accounting bill in HP/Compaq merger

Hewlett Packard's chief financial officer has admitted that the proposed merger with computer manufacturer Compaq would cost $1.4bn (£998m), with up to $700m (£494m) in purchase accounting and goodwill costs.

Bob Wayman, HP’s CFO told a meeting with securities analysts in New York that it would cost $450m to $700m in restructuring charges and an additional $450m to $700m in purchase accounting and goodwill costs.

The final price tag will be between $800m and $1.4bn, but Wayman said he believed the actual costs would likely be nearer $800m.

Wayman pointed out that US job cuts cost less than those in Europe andthe company had still not yet announced which HP and Compaq employeeswould be among the 15,000 that will be let go following the merger.

Most of the restructuring charges would be booked in the 2002 fiscal year, whichends in October, he said.

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