So this was Compaq CEO Michael Capellas' grand plan to transform the company within 180 days: sell it to competitor Hewlett-Packard for $25 billion in shares.

The two companies last night announced a mega-merger in which HP shareholders will have 64 per cent of the combo and Compaq shareholders will take 36 per cent. HP CEO Carly Fiorina will be top banana for the new entity, assuming CEO and Chairman duties. Compaq CEO Michael Capellas will become president, and he's joined on the new board by four Compaq staffers. And finally Fiorina gets her Big Deal. Last time she tried was the aborted $18 billion takeover of PWC's consultancy arm. That was a Vision-build-up-the-services-business-Thing. The takeover of Compaq is a chisel- away-at-costs/swamp-the-competition exercise in corporate aggrandisement. The HP-Compaq combo will be the world's no.1 in all sorts of computer hardware, ranging from printers, PCs, and Unix servers. Combined revenues at $87bn will almost match those of IBM (although the duo has nothing like Big Blue's service revenues). That's if the two companies retain market share in what will inevitably be a prolonged period of introspection. First the merger will have to get past competition authorities in the US and the EU; second, there will inevitably be thousands of lay-offs - and not just in the assembly plants. Already, $2.5bn worth of post-merger savings - 15,000 jobs - have been identified.