In a flashback to headier times, it’s Takeover Tuesday today, with a couple of large surprise deals in the news.

Hewlett-Packard Co. is buying rival Compaq Computer Corp. for US$25 billion in stock.

The deal, which sees the number two computer maker buying the number three firm, will create a company almost as big as IBM. This is boosting boxmaker stocks, and buoying futures generally.

In the other big deal of the day, Devon Energy Corporation is buying Anderson Exploration Ltd. for US$4.6 billion, including US$1.2 billion in assumed debt. Devon will acquire estimated proved reserves of 532 million barrels of oil equivalent and approximately eight million net undeveloped acres.

Also on the M&A front, Liberty Media Corp. is spending US$5 billion for six German TV networks from Deutsche Telekom AG, making it the biggest European cable operator.

It’s not all sweetness in light in the tech game today though. Marconi plc is seeing the resignation of its CEO and its chairman, along with plans to cut 2,000 jobs. Also, Sanmina Corp. has issued an earnings warning, and Ericsson AB sees its demand staying flat.

The weakness in Ericsson is weighing on stocks in Europe. As well, today’s merger action has the dollar up against the euro. Stocks are mixed. The FTSE is up 10 points to 5,322. The CAC 40 is down 19 points to 4,611. The DAX has dropped 10 points to 5,084.26.

Overnight in Asia, stocks bounced strongly on news of the HP deal. The Nikkei added 363 points to 10,773. In Hong Kong, the Hang Seng gained 234 points to 11,137.

On Monday, Tokyo stocks plunged to a new 17-year-low following a slew of profit warnings by high-tech companies. The benchmark 225-issue Nikkei stock average shed 303.83 points, or 2.84%, to finish at 10,409.68.

In other news, Petrobank Energy and Resources Ltd. and Ventus Energy Ltd. are bucking the M&A trend. They have agreed to terminate their previously announced merger. No reason was given for the move.