PALM Palm (MM)

Palm Inc. (PALM) shareholders have approved takeover plans by Hewlett-Packard Co. (HPQ), clearing the way for a $1.2 billion deal that would unite the smartphone innovator with the world's largest computer maker.

The deal comes as the one-time mobile device leader has struggled to gain traction in the consumer market, being eclipsed by Research In Motion Ltd.'s (RIMM) Blackberry, Apple Inc.'s (AAPL) iPhone and devices built to use software made by Google Inc. (GOOG).

The deal gives H-P a much larger presence in the smartphone market. It also gives it Palm's WebOS operating system software, which H-P has indicated it plans to use in many other devices.

Over the past half year, H-P has positioned itself to enter the tablet market, a nascent field that is led by Apple's iPad. H-P unveiled a prototype tablet, called the "Slate," earlier this year that ran Microsoft Corp.'s (MSFT) Windows operating system.

The transaction is expected to close on July 1.

In after-hours trading, Palm shares were down 0.3% at $5.68, while H-P were little changed at $45.93.

-By Ian Sherr, Dow Jones Newswires; 415-439-6455; ian.sherr@dowjones.com

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