HP EDS Merger

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On May 13, 2008, the Electronic Data Systems (EDS) website announced that Hewlett-Packard (HP) and EDS have reached a $13.9 billion agreement to merge.

Hardware and software technology giant HP announced after the stock market closed on May 12, 2008, that they have been in discussions for a possible merger with EDS Corporation, a technology services company that delivers outsourcing services to clients in the government, retail, manufacturing, and numerous other industries.

The deal, which is HP's largest since acquiring Compaq for $20 billion in 2002, is set to close later in 2008 and will give EDS stockholders $25 per share. It will make HP the second-largest company of its kind, a close second to IBM.

HP is headquartered in Palo Alto , California. The company first started in a garage, focusing on developing electronic test and measurement equipment. HP produced the first hand held scientific calculator and personal computers.

EDS is headquartered in Plano, Texas. They're a business and technology services company and are listed on the Fortune 500 list as one of the largest service companies.

"[Hewlett-Packard] confirmed that it is engaged in advanced discussions with Electronic Data Systems (NYSE: EDS) Corporation regarding a possible business combination involving the two companies."—Hewlett-Packard

"There can be no assurances that an agreement will be reached or that a transaction will be consummated. [HP] does not intend to comment further until an agreement is reached or discussions are terminated."—Hewlett-Packard

"I think HP has been wanting in some sense to be more like IBM for quite a while, It's perfectly consistent with what HP has been trying to do to become more of a solutions provider rather than (just) a product or technology provider. Whether this is going to make sense is going to turn very much on what kind of price HP can get."—Gordon Haff, analyst with Illuminata