(Bloomberg) -- Hewlett Packard Enterprise Co. said it’s spinning off and merging some non-core software assets in a deal with U.K.-based Micro Focus International Plc valued at about $8.8 billion.
As part of the deal, HPE said it will receive $2.5 billion in cash and its shareholders will have 50.1 percent ownership in the new merged company. The software assets include areas such as application delivery management, big data and enterprise security, the Palo Alto, California-based company said Wednesday in a statement.
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Micro Focus, based in Newbury, England, can use the assets to bolster its software products that help companies on a variety of fronts, including business applications, security and with data centers. The combined company will be led by Kevin Loosemore, executive chairman of Micro Focus. Micro Focus expects to improve the margin on Hewlett Packard Enterprise’s software assets by about 20 percentage points by the end of the third full financial year following the close of the transaction, the companies said.
Hewlett Packard Enterprise has been considering a sale of some of its software assets, people familiar with the matter said in July, in an effort to slim down its operations.
Chief Executive Officer Meg Whitman -- who split HPE from sister company HP Inc. in November -- is looking for more ways to pare down her company. Her aim is to make Hewlett Packard Enterprise nimbler to woo customers with more options from cloud-computing providers such as Amazon.com Inc. and Microsoft Corp.
