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HP makes $14 billion bid for EDS
Hewlett Packard (HP) and Electronic Data Systems (EDS) announced Tuesday that they have signed a definitive agreement under which HP will purchase EDS at a price of $25.00 per share, for a value of approximately $13.9 billion.
The terms of the transaction have been unanimously approved by the HP and EDS boards of directors.
The transaction 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 in fiscal 2007.
The companies’ collective services businesses, as of the end of each company ’ s 2007 fiscal year, had annual revenues of more than $38 billion and 210,000 employees, doing business in more than 80 countries.
EDS, founded by entrepreneur and presidential candidate Ross Perot, has an office in Herndon and employs over 2,000 people in the Metro Washington D.C. area.
HP 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. HP plans that EDS will continue to be led after the deal closes by EDS Chairman, President and Chief Executive Officer Ronald A. Rittenmeyer, who will join HP ’ s executive council and report to Mark Hurd, HP ’ s chairman and chief executive officer.
“ The combination of HP and EDS will create a leading force in global IT services, ” said 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. ”
Under the terms of the merger agreement, EDS stockholders will receive $25 for each share of EDS common stock that they hold at the closing of the merger.
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