Two of the world's global advertising agencies will be watching the move with interest, as the move is likely to lead to swift rationalisation and consolidation following similar patterns established by previous mergers.
The Compaq account, worth $350m (£241.6m), is currently held by FCB, headed out of New York. The majority of the global HP account was consolidated into Publicis Groupe last year, where the work is split between Saatchi & Saatchi and Publicis.
Compaq is the bigger advertiser of the two, spending an estimated £25m on advertising in the UK last year, compared with HP's £15.9m spend. Media planning and buying for Compaq is handled by BMP Solutions in Media, while Zenith and Optimedia handle HP.
According to the official announcement, the new company will be an $87bn (£60.1bn) strong entity, and take the number one spot in the world for servers, PCs and hand-held devices.
HP says it will make annual savings of $2.5bn (£1.7bn) through the merger and is expected to cut 6,000 jobs. Compaq will make 8,500 job cuts.
Both firms have been struggling in the face of the global downturn as sales of PCs and now IT equipment plummets.
Compaq, once the world's number one PC manufacturer, has lost its dominant position to Dell.