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HP-Compaq merger could cost their Israeli branches 100 jobs, says local research firm

The merger's Israeli outfit could overtake IBM in PC sales to domestic market, predicts expert

Some 100 people in Israel could lose their jobs as a result of the Hewlett Packard (NYSE:HWP) - Compaq Computer Corp. (NYSE:CPQ) merger, estimates research company Meta Group Israel.

Compaq Israel has 450 employees. HP Israel is thought to have 200.

HP is acquiring Compaq for $25 billion in stock. The merger will create a company with annual revenues of almost $90 billion.

Meta Group expects the merger to give HP-Compaq the edge in the Israeli PC market, over IBM Corporation (NYSE:IBM).

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Gideon Lopez, research director of the Israeli branch of IDC, a leading provider of technology intelligence and market data, predicts the merger will create the biggest computerization company in Israel, with annual sales exceeding $550 million (based on 2000 data).

HP-Compaq will also find itself in competition with Tel Aviv-based Ness Technologies and Matrix (formerly ForSoft) of the Formula Systems (Nasdaq:FORTY) group.