Hewlett-Packard's proposed acquisition of Compaq passed a regulatory hurdle on Wednesday when the US Federal Trade Commission (FTC) concluded its review of the deal.
As shareholders and company executives continued to exchange jabs over the proposal, the FTC voted unanimously to close its investigation into the acquisition without demanding any changes to the terms of the proposed deal. The agency, which monitors market competition, said it "did not find reason to believe that the proposed transaction would impair competition in any relevant market", according to a statement.
The FTC is just the latest government agency to give HP a thumbs-up in its effort to acquire Compaq. The European Union cleared the deal on January 31. A month earlier, the Canadian Competition Bureau completed its review of the proposed buyout, finding no issues of competitive concern.
While HP executives continue to promote the acquisition as a benefit to customers and the computer industry, the heirs of company founders William Hewlett and David Packard, who hold roughly 18 per cent of the company's shares through individual ownership and family trusts, have come out against the proposed buyout. Walter Hewlett, a company board member and son of William Hewlett, has been the most vocal opponent of the deal, launching an aggressive media campaign.
On Wednesday, Institutional Shareholder Services (ISS), an influential investment group, threw its support behind the acquisition. ISS advises some of HP's largest shareholders, and its support could swing votes in favour of the deal. For example, Barclays Bank has said it will vote its 3.1 per cent stake in line with ISS's recommendation.
HP shareholders are expected to vote on the deal at a meeting on March 19. For the deal to go through, it will also require the approval of Compaq shareholders, who will vote at a separate meeting on March 20.