Carly Fiorina bet HP's future on the Compaq merger — and the board fired her for it

In 2002, HP CEO Carly Fiorina championed the $25 billion acquisition of Compaq, a deal that would create the world's largest PC maker. The merger was opposed by Walter Hewlett (son of co-founder Bill Hewlett) and a significant portion of shareholders, who argued that the PC business was a low-margin commodity and that HP should focus on higher-value businesses.

Fiorina won the shareholder vote by a narrow margin, but the merger underdelivered on its promised synergies. The integration was complex and disruptive, and the combined company struggled to achieve the cost savings and market position that had been projected. HP's stock underperformed, and the board's patience ran out.

In February 2005, the board fired Fiorina. The Compaq merger continued under subsequent leadership, but HP never achieved the dominance that Fiorina had promised. The case illustrated how a CEO's personal conviction can drive a deal that the organization cannot execute, and how a narrow shareholder victory does not guarantee a successful integration.