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HP to Buy EDS


May 13, 2008


Palo Alto, Calif.-based Hewlett-Packard Co. plans to purchase Electronic Data Systems in a deal valued at about $13.9 billion. The acquisition, which is expected to close in the second half of 2008, already has been approved by the boards of directors for both companies.

Executives at HP expect the purchase will more than double the company's services revenue, which was $16.6 billion in its 2007 fiscal year, as well as further its services businesses. HP offers hardware, software, infrastructure and I.T. services in health care and other industries, Plano, Texas-based EDS offers technology consulting services across multiple industries. The company also has built and continues to manage administrative systems for Medicaid agencies in many states.

As a result of the acquisition, HP will establish a new business group, to be branded EDS – an HP company, which will operate in EDS's existing facilities in suburban Dallas. Ronald A. Rittenmeyer, EDS chairman, president and CEO, will continue to lead the group after the deal closes. He will report to HP chairman and CEO Mark Hurd.

HP and EDS had combined annual revenue of more than $38 billion in 2007. Shares of HP were down 6%, at $44.01 a share in early morning trading May 13 on the New York Stock Exchange. Shares of EDS, however, were up 1.5% at $24.45 a share.

For more information, go to hp.com.


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