Hewlett-Packard

Founded: 1938 Employees: 86,200 2001 Revenues: $45.2bn 2001 profits: $408m CEO: Carly Fiorina

The merger - originally proposed in June 2001 - prompted a bitter battle and the shareholder vote was only won by a wafer-thin margin.

Mr Hewlett, heir to one of HP's founders, led the opposition to the deal, culminating in allegations that HP boss Carly Fiorina had bought off shareholders.

The Delaware Chancery Court on Tuesday rejected these claims, and Mr Hewlett said he would not appeal.

In a statement, the rebel said he would "now do everything possible to support the successful implementation of HP's acquisition of Compaq".

Distractions

The court also dismissed allegations that HP executives misled investors by exaggerating the financial benefits of buying up Compaq.

Compaq

Founded: 1983 Employees: 63,700 2001 Revenues: $33.5bn 2001 loss: $785m CEO: Michael Capellas

The $18bn merger between the two companies will be the hardware sector's biggest ever tie-up.

Many HP shareholders opposed the deal because they thought it would distract from day-to-day operations at a time when computer makers worldwide were struggling to win new orders.

There were concerns also that HP was being asked to pay over the odds for Compaq.

Mr Hewlett had claimed that Ms Fiorina coerced Deutsche Bank, a major shareholder, into backing the merger by threatening to withhold future investment banking business.

Close-run

A preliminary count of the HP shareholder meeting on 19 March showed a narrow majority of 51.4% in favour of the deal.

Compaq shareholders, in contrast, voted in favour of the deal by a wide majority.

HP executives have said they are confident that that the final tally will carry the merger.

Ms Fiorina is one of the most powerful women in US business and she has bet her career on the merger's success.

"I think the company's success will by my legacy," she said in October. "The company's failure will be my failure, with all the predictable consequences of that."

HP shares closed 24 cents lower at $16.86 on Wednesday, while Compaq rose 50 cents to $10.65.