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HP completes EDS acquisition

Marguerite Reardon CNET News.com

Published: 27 Aug 2008 10:41 BST

HP completed its acquisition of computer services giant EDS on Tuesday.

The deal, worth about $13.9bn (£7.5bn) when it was first announced in May, is among the technology industry's largest ever. The deal is also the second largest for HP since its acquisition of Compaq was completed in 2002.

HP executives have said they are buying EDS to expand HP's business beyond traditional computing and printers. HP has been trying to develop its software and services business over the last few years. EDS adds a service component that will help the company compete head-to-head with IBM.

Annual revenue for HP and EDS combined in fiscal 2007 was more than $38bn, with 210,000 employees between the two companies, operating in more than 80 countries.

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Some experts, however, have said that, once the combined company manages to get through the integration, it will still have a long, tough road ahead as it tries to compete with IBM.

Under the deal, EDS will operate a new business unit, which will be called EDS. It will continue to be led by EDS's current chief executive, Ronald Rittenmeyer.

The deal has had the support of HP shareholders from the beginning. It won approval from US antitrust authorities on 30 June and passed muster with European regulators on 26 July.

Credit: Hewlett-Packard seals EDS deal from CNET News.com