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HOUSTON-Inside sources tell GlobeSt.com that Hewlett-Packard Corp. is planning to house its engineering operations and product development at the Compaq Computer campus once the merger is finalized.

The Palo Alto, CA-based Hewlett-Packard will be getting a 1,000-acre Compaq corporate campus, a hallmark of northwest Houston, in the takeover. The source says HP’s strategy is to use the site for development of products for industry stand servers and Intel-based businesses.

The Compaq campus’ fate is hushed, but published reports claim a 10% company-wide layoff will result from the merger. The campus consists of roughly 300 developed acres on the west side of Texas 249 in the city’s far northwest submarket. The east side contains about 700 acres of undeveloped land. Compaq began developing the space in 1983 and currently has 23 buildings on the property.

The combined company will have top worldwide revenue positions in servers, access devices (PCs and handhelds), imaging and printing as well as leading revenue positions in IT services, storage, and management software. Based on both companies’ last four reported fiscal quarters, the emerging HP would have approximate pro forma assets of $56.4 billion, annual revenues of $87.4 billion and annual operating earnings of $3.9 billion. It would also have operations in more than 160 countries and over 145,000 employees.

Carly Fiorina, HP’s chairman and CEO, will hold the same posts for the post-merger company. Michael Capellas, Compaq’s chairman and CEO, will be the new president. Capellas and four other members of Compaq’s current board of directors will join HP’s board when the deal closes in the first half of 2002.

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