HP Offers US$13.9 Billion for EDS

By Michelle Savage

May 13, 2008 —  In a merger that could result in a hardware, software and technology services powerhouse, Hewlett-Packard (HP) today said that it signed a definitive agreement to purchase Electronic Data Systems Corp. (EDS), an IT services company. The deal is valued at approximately US$13.9 billion.

Mark Hurd, HP's chairman and CEO, announced during a news conference that HP will create a new business group, which will be branded EDS—an HP company. EDS will continue to be led by its own chief executive Ron Rittenmeyer, who will report to Hurd when the deal closes. The combined companies will have 210,000 employees in 80 countries. Hurd said they would combine the firms for efficiency purposes, perhaps reducing the workforce, although no specific terms were given.

According to HP, buying EDS advances HP's goal to strengthen its services business. The specific service offerings delivered by the combined companies are IT outsourcing, including data center services, workplace services, networking services and managed security; business process outsourcing, including health claims, financial processing, CRM and HR outsourcing; applications, including development, modernization and management; consulting and integration; and technology services.

The deal is expected to close in the second half of 2008 and to more than double HP's services revenue, which amounted to $16.6 billion last year. It represents HP's largest acquisition since it bought Compaq for nearly $20 billion in 2002.



Related Search Term(s): HP, outsourcing

Share this link: http://www.sysmannews.com/link/32190