The new Hewlett-Packard (HP), proposed to be formed from the merger of computing and imaging solutions and services provider HP and enterprise technology and solutions provider Compaq Computer Corporation, will be an $87 billion world technology leader, a statement said following the merger agreement.

"The merger is expected to generate cost synergies reaching approximately $2.5 billion annually and drive a significantly improved cost structure. Based on both companies' last four reported fiscal quarters, the new HP would have approximate pro forma assets of $56.4 billion, annual revenues of $87.4 billion and annual operating earnings of $3.9 billion," said the statement. It will also have operations in more than 160 countries. The merged entity will be headquartered in Palo Alto and retain a significant presence in Houston, which will be a key strategic center of engineering excellence and product development. The agreement awaits ratification.