HP to acquire EDS

Hewlett-Packard Co. will buy EDS Corp. for $13.9 billion, the computer manufacturer announced Tuesday.

The transaction, which is expected to close in the second half of the year, would more than double HP's services revenue, which amounted to $16.6 billion in fiscal 2007, HP said in an announcement on its Web site. The deal has been approved by the boards of both companies.

HP said it will establish a new business group to be branded EDS - an HP company, which will be based at EDS headquarters in Plano, Texas.

The combined companies' specific service offerings will include information technology outsourcing, including data center services, workplace services, networking services and managed security; business process outsourcing, including health claims, financial processing, customer relationship management and human resources outsourcing; applications, including development, modernization and management; consulting and integration; and technology services.

After the deal closes, EDS will continue to be led by Ronald Rittenmeyer, EDS' chairman, president and chief executive officer, who will join HP's executive council and report to Mark Hurd, HP's chairman and CEO.

About the Authors

David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.

William Welsh is a freelance writer covering IT and defense technology.

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