Hewlett-Packard (HP) of Palo Alto, CA, will acquire Electronic Data Systems (EDS) of Plano, TX, for $13.9 billion.
The terms of the transaction, which will have HP purchase EDS stock at $25 per share, have been unanimously approved by both companies' boards of directors.
The acquisition could close before the end of this year and more than double HP's services revenue, which totaled $16.6 billion in fiscal 2007. Combined, the companies' services businesses account for more than $38 billion in revenues. HP and EDS have approximately 210,000 employees in more than 80 countries.
HP will create a new business group known as EDS, an HP company that will be headquartered at EDS's current executive offices in Plano. HP also will retain EDS Chairman, President, and CEO Ronald A. Rittenmeyer to head the new entity.
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