HP to Acquire EDS?
HP to Acquire EDS?
May 14, 2008: Both HP and Electronic Data Systems have confirmed that they are in acquisition talks, with the former reportedly close to signing a US$12 to $13 (AU$12.73 - $13.79) billion deal with EDS.
In separate press releases, the two addressed rumours of the deal saying that they are in “advanced discussions regarding a possible business combination transaction”, however, beyond this details are scant.
HP added to its release that “[t]here can be no assurances that an agreement will be reached or that a transaction will be consummated” and that it “does not intend to comment further until an agreement is reached or discussions are terminated.”
The Wall Street Journal claims the deal is in the US$12 to 13 billion realm which, based on EDS’s current trading price, is significantly higher than its worth, indicating that HP is deadly serious about closing the deal.
If completed, the acquisition will be the largest in the firms history since its takeover of Compaq in 2002.
UPDATE: This morning HP has announced that it has signed a definitive agreement to purchase EDS for US$25 per share, or US$13.9 (AU$14.74) billion. The transaction is expected to close in the second half of 2008, and to more than double HP’s services revenue.
HP says it intends to establish a new business group, to be branded EDS – an HP company, which will be headquartered at EDS’s existing executive offices in Plano, Texas.
“The combination of HP and EDS will create a leading force in global IT services,” said Mark Hurd, HP’s chairman and chief executive officer. ”Together, we will be a stronger business partner, delivering customers the broadest, most competitive portfolio of products and services in the industry.”
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