NEW YORK, Sept. 4 - Computer giant Hewlett-Packard plans to acquire rival Compaq in a $25 billion deal that will likely bear a more agile competitor to Sun Microsystems and IBM, representatives from Compaq confirmed on Tuesday.

The new company, which will retain the Hewlett-Packard name and Palo Alto, Calif., headquarters, will be home to roughly 145,000 employees and generate some $87 billion in annual revenue.