Palm, the leader of the personal digital assistant industry, on Wednesday announced plans to buy its smaller rival, Handspring, in an all-stock transaction.
The value of the deal is unknown until Milpitas, Calif.-based Palm completes a previously announced spinoff of PalmSource, the subsidiary that develops and licenses use of the Palm OS operating system for handheld computers. Palm officials say they will disclose details of the PalmSource separation in a regulatory filing later this month.
Handspring shareholders will receive 0.09 shares of Palm stock for each share of Handspring stock they currently own, for a total of 13.9 million Palm shares, the companies say. Based on Palm's Wednesday opening price of $13.15, the deal would be worth $182.8 million.
Handspring shares opened the session at $1.25.
According to the companies, current brand names will survive the merger. Palm will retain its current Zire and Tungsten PDA lines, while the Handspring operation in Mountain View, Calif., will continue to produce its Treo-branded "smartphones," which combine PDA, mobile phone and Internet functions.