Hewlett-Packard Co., the Palo Alto, Calif.-based computer giant, announced it reached a definitive agreement to acquire Electronic Data Systems Corp., Plano, Texas, a major provider of outsourced computer services to Medicare, Medicaid, the Defense Department and other government agencies, for $25 a share, a deal HP values at $13.9 billion and hopes to consummate by the end of 2008 funded with a combination of cash and debt.
HP Chairman, President and Chief Executive Officer Mark Hurd, in a news conference webcast, said the deal for EDS expands our IT services portfolio and will more than double HPs services business. The two companies had combined revenue from services of $38 billion for their fiscal 2007, of which HP had $16.6 billion, according to an HP news release.
EDS will be placed into a newly created HP business unit based in Plano and headed by Ronald Rittenmeyer, EDS current chairman, president and CEO, Hurd said. EDS was founded in 1962 as Electronic Data Systems by former IBM Corp. sales executive Ross Perot. It was acquired by General Motors Corp., a major customer, in 1984 and split off in 1996 as an independent company. -- by Joseph Conn