HP to acquire EDS for more than $12b

New York: Hewlett-Packard (HP) has struck a deal to buy Electronic Data Systems Corp (EDS) for $12.6 billion (Dh46.24 billion), seeking to boost its technology services business to better compete against market leader IBM.

The companies said the deal values EDS at $25.00 per share, a 33 per cent premium to its closing price on Friday.

The acquisition, expected to close in the second half of 2008, will more than double HP's services revenue, which amounted to $16.6 billion in fiscal 2007. the companies said.

Meanwhile, HP posted better-than-expected quarterly profit yesterday in a preliminary earnings report.

Net income in the second quarter ended on April 30 was 80 cents a share, up from 65 cents a year earlier, on revenue of $28.3 billion.

Excluding special items, the profit was 87 cents a share, beating Wall Street forecasts of 84 cents.