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Fiorina defends merger
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February 13, 2002: 7:14 p.m. ET
HP CEO says merger can work; still sees $2.5 billion in cost savings.
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NEW YORK (CNN/Money) - Hewlett-Packard Chairman and CEO Carly Fiorina on Wednesday hit out against Walter Hewlett's assertions that large computing mergers, such as the proposed $25 billion merger of HP and Compaq, consistently fail.
"This is a merger of consolidation, not diversification," Fiorina told Lou Dobbs Moneyline. "A merger that both creates market leadership and lets us reduce cost structure and improve our profitability."
Fiorina also affirmed her forecasts that HP's takeover of Compaq (CPQ: up $0.28 to $11.40, Research, Estimates) would result in $2.5 billion in cost savings, with $2 billion coming at the end of 2003. She said there may also be some upside to that figure.
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HP CEO Carly Fiorina speaks with CNN's Lou Dobbs on the proposed merger with Compaq and Walter Hewlett.
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But Fiorina refused to characterize her personal relationship with Walter Hewlett, saying it was "not germane."
In a letter to Walter Hewlett earlier Wednesday, six HP directors said they were extremely disappointed with how he has opposed the Compaq takeover. The directors maintained that the deal for Compaq is the result of a two-and-a-half year process and expressed their continued support for Fiorina.
Fiorina also used the company's strong first-quarter earnings as a selling point for the deal. HP (HWP: up $0.21 to $20.98, Research, Estimates) said it earned 29 cents per share, excluding merger-related and other one-time charges, during the quarter ended Jan. 31, four cents better than expectations.
"There is one point I agree with Walter Hewlett on," Fiorina said. "This is not a company in crisis." 
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