HP acquired Compaq in 2002 for approximately $25 billion.
Compaq was founded in 1982 by Rod Canion, Jim Harris, and Bill Murto. It became one of the leading makers of IBM-compatible personal computers and was known for portable computers and business-focused systems. The company also expanded into servers and enterprise technology through acquisitions such as Digital Equipment Corporation.
Hewlett-Packard announced the planned acquisition in September 2001. The deal was structured as a stock transaction valued at roughly $25 billion and completed in May 2002. HP argued that combining the companies would create a stronger competitor against IBM and Dell and produce operating efficiencies.
The merger was controversial inside HP. Walter Hewlett, a director and son of co-founder William Hewlett, opposed it, but shareholders approved the transaction. Compaq became part of HP, and the Compaq brand continued for some products for several years. The deal is sometimes confused with HP’s later 2011 decision to acquire software company Autonomy, which was a separate and much smaller transaction.