|
Tuesday, 13 May 2008 |
|
US$13.9bn move seen as a challenge to IBM.
HP today confirmed plans to buy EDS for a cool US$13.9bn. EDS will be rolled into HP’s existing IT services division, which will be rebranded as... wait for it... ‘EDS – an HP company’.
The US$25 per share being paid by HP is a considerable premium to the US$16-19 at which EDS has been trading for much of this year.
“The combination of HP and EDS will create a leading force in global IT services”, said HP Chairman and CEO Mark Hurd. “Together, we will be a stronger business partner, delivering customers the broadest, most competitive portfolio of products and services in the industry. This reinforces our commitment to help customers manage and transform their technology to achieve better results.”
Ronald A Rittenmeyer, President, Chairman and CEO of EDS, added, “first and foremost, this is a great transaction for our stockholders, providing tremendous value in the form of a significant premium to our stock price. It's also beneficial to our customers, as the combination of our two global companies and the collective skills of our employees will drive innovation and enhance value for them in a wide range of industries.”
Based on 2007 performance, the combined IT services division has revenues of US$38bn (HP’s on its own had US$16.6bn for the year).
The unit will also have 210,000 employees. Expect many of them to be shown the exit once the ink is dry on the deal.
Jim Chalmers
|
