To print: Click here or Select File and then Print from your browser's menu

This story was printed from silicon.com, located at http://www.silicon.com/

Story URL: http://management.silicon.com/itdirector/0,39024673,39275896,00.htm

HP completes EDS acquisition
Ready to take on IBM?

By Marguerite Reardon

Published: Wednesday 27 August 2008

HP completed on Tuesday its mega-acquisition of computer services giant EDS.

The deal, worth about $13.9bn when it was first announced in May, is among the largest in the technology industry. It's also the second largest one for HP since its acquisition of Compaq was completed in 2002.

HP executives have said they are buying EDS to expand HP's business beyond traditional computing and printers. HP has been trying to develop its software and services business over the last few years. EDS adds a service component that will help the company compete head-to-head with IBM.

Annual revenue for HP and EDS, combined, in fiscal 2007 was more than $38bn with 210,000 employees between them operating in more than 80 countries.

But bigger doesn't always mean better. Merging the companies' businesses and cultures won't be easy. And once the combined company manages to get through the integration, some experts say it still has a long, tough road ahead of it as it tries to compete with IBM.

Under the deal, EDS will operate a new business unit, which will be called EDS. It will continue to be led by EDS' current CEO, Ronald Rittenmeyer.

The deal has had the support of HP shareholders from the beginning. It won approval from US antitrust authorities on 30 June and passed muster with European regulators in July.