By Lisa Kerner
Charlotte, N.C., May 13 - Hewlett-Packard Co. said it entered into a definitive agreement to purchase Electronic Data Systems Corp. for $25 per share, or approximately $13.9 billion.
Electronic Data Systems confirmed it was in discussions with Hewlett-Packard on Monday.
Both companies' boards of directors have approved the transaction, which is slated to close in the second half of 2008, according to a Hewlett-Packard news release.
The merger agreement includes a termination fee of $375 million payable by Electronic Data Systems to Hewlett-Packard under specified circumstances, it was reported in a form 8-K filing with the Securities and Exchange Commission.
Hewlett-Packard said it will establish a new business group, to be branded Electronic Data Systems - an HP company. It will be based in Plano, Texas, and led by Electronic Data Systems chairman, president and chief executive officer Ronald A. Rittenmeyer.
The combined annual revenue for Electronic Data Systems' and Hewlett-Packard's services businesses topped $38 billion in 2007, the release stated.
The transaction is expected to be accretive to Hewlett-Packard's fiscal 2009 non-GAAP earnings and accretive to 2010 GAAP earnings, Hewlett-Packard said.
Electronic Data Systems is a technology services company based in Plano, Texas.
Hewlett-Packard is a Palo Alto, Calif., computer, printing and imaging technology company.
| Acquirer: | Hewlett-Packard Corp.
|
| Target: | Electronic Data Systems Corp.
|
| Announcement date: | May 13
|
| Transaction total: | $13.9 billion
|
| Price per share: | $25.00
|
| Termination fee: | $375 million
|
| Expected closing: | Second half of 2008
|
| Stock price of target: | NYSE: EDS: $24.13 on May 12
|
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