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Article

Title: H-P to Buy Mercury for $4.5 Billion In CEO Hurd's First Big Purchase

Author: Clark, Don; Forelle, Charles Article Type: Product Analysis
Source: Wall Street Journal, v248 n21 pA3(1) Publication Date: Jul 26, 2006
  ISSN: 0193-2241
URL of Publication: http://www.wsj.com

Hewlett-Packard (HP) has announced that it will pay $4.5 billion to purchase Mercury Interactive, a business software maker, and the acquisition will be the first major one on CEO Mark Hurd's watch. Mercury is a specialist in programs that assist companies in developing and testing their own business software and managing their own development projects. Mr. Hurd regards Mercury as an excellent opportunity because its products complement a currently available suite of HP programs that assists companies in managing their computer systems and associated technology. The purchase demonstrates that H-P is building a software business that is to be reckoned with, said Mr. Hurd when speaking to reporters during a conference call. Mercury's stock options issues were considered before the acquisition for possible risk to HP, and HP has a level of surety that the matters will be resolved. Mercury went through a large and expensive internal investigation after dozens of problematic option grants were shown to have been backdated to give recipients the benefit of lower exercise prices. The discovery led to the imposed exodus of Mercury ex-CEO Amnon Landan and two other officials. A former finance chief has also received a Wells notice, and the Securities and Exchange Commission (SEC) is performing a formal investigation of Mercury Interactive.

Companies:
Hewlett-Packard Co Mercury Interactive Corp

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