Webb McKinney, a senior Hewlett-Packard executive, first learned of his company's plans to buy Compaq Computer three days before the deal was announced early in September.
Carly Fiorina, the chief executive of Hewlett-Packard, summoned him to her office in Palo Alto, California, and told McKinney of the proposed merger. Then she asked him to lead the team that would plan how the two companies would fit together, with what products and how the combined company would achieve cost-savings and revenue targets that she would present to Wall Street in three days as the financial rationale for the deal.
McKinney recalled it as a "short and direct conversation," and a total surprise. "It was one of those meetings," he said, "where you walk out of it and say to yourself, `Oh, my Lord.'"
McKinney considered the move for two days, a process that included long talks with consultants about what makes mergers succeed or fail. Then he called Fiorina, who was on a company jet headed to New York to announce the deal. "Yeah, I'm a go," he told her. And, he said last Friday, "I never looked back."
McKinney, a 32-year veteran of Hewlett-Packard, has proved to be a shrewd choice so far, both in and outside the company. An engineer-turned-manager, McKinney has worked throughout Hewlett-Packard, from the research laboratories to heading the worldwide corporate sales force. He is widely admired within the company, a good person to represent a merger that will inevitably meet some resistance within the ranks.
Fiorina said she chose McKinney for the daunting task because of his breadth of executive experience, his skills and his temperament. And, she added, "he commands respect."
McKinney, who is co-chairman of the merger integration team with Jeff Clarke, Compaq's chief financial officer, also played an important role in selling the deal to Wall Street analysts and institutional investors. McKinney and Clarke traveled to Institutional Shareholder Services, an influential advisory firm in Rockville, Maryland, where they made "a meticulous and exhaustively detailed presentation," according to the firm's report recommending that shareholders approve the merger.
Others were apparently impressed as well. Hewlett-Packard declared last Tuesday that it had won shareholder support for the deal by a "slim but sufficient" margin. Walter B. Hewlett, an heir who led the opposition to the acquisition of Compaq Computer, said the vote was too close to call. The official tally by a firm of vote inspectors will not be finished for weeks.
But unless the company's claim of victory is surprisingly overturned, McKinney and the rest of the integration team will soon see their plans put into action.
A recipe for trouble
Industry analysts are skeptical. Big mergers are always tricky, but in the computer industry, putting two large companies together has been a recipe for trouble. Typically, as the combined company grapples with internal turmoil created by the merger, the fast-moving technology markets move on and customers defect to competitors.
Making Hewlett-Packard an exception to that pattern of failure is the challenge facing McKinney and his team. Since the merger was announced, the size of the integration team has grown to more than 1,000 employees from the two companies. They have worked an estimated 1.3 million hours on the integration planning, and, among other things, have studied and talked to the veterans of a dozen successful large mergers -- mostly in other industries like oil and banking.
RSS