That didn't take long. HP announced this morning that it will acquire EDS for $13.9 billion, or $25 a share. The deal comes just hours after the companies acknowledged they were in talks, and has been unanimously approved by the HP and EDS boards of directors. The transaction should close in the second half of this year, HP said.
Buying EDS will 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.
HP will create a new business group, to be branded "EDS - an HP company," which will be based at EDS's existing executive offices in Plano, Texas. EDS will continue to be led by EDS Chairman, President and CEO 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."
"First and foremost, this is a great transaction for our stockholders, providing tremendous value in the form of a significant premium to our stock price," Rittenmeyer said. "It's also beneficial to our customers, as the combination of our two global companies and the collective skills of our employees will drive innovation and enhance value for them in a wide range of industries. In addition, our Agility Alliance will be significantly strengthened."
We're staffing the DataCenterDynamics event in Washington today, but watch Techmeme to track response to the deal. We'll be back with more coverage tomorrow.