HP to buy EDS for 13.9 bln dlrs, to expand services

SAN FRANCISCO, May 13, 2008 (AFP) – Hewlett-Packard Co. on Tuesday revealed a 13.9-billion-dollar deal to buy Electronic Data Systems in a tie-up that creates a global powerhouse in computer services to compete against IBM. World leading computer maker HP said it will buy Texas-based business services outsourcing titan EDS for 25 dollars a share in cash, representing a 32.6 percent premium for EDS shares.

“The combination of HP and EDS will create a leading force in global IT services,” said HP chief executive Mark Hurd.

“Together, we will be a stronger business partner, delivering customers the broadest, most competitive portfolio of products and services in the industry.”

California-based HP’s massive data centers and experience in business computing hardware should mesh well with the expertise EDS has in outsourcing technical services for companies, according to analysts.

“It is a very bold move but I wouldn’t say it’s a super surprising move given what HP’s core strengths are,” IDC executive vice president of worldwide research Crawford Del Prete told AFP.

“They complement each other very well. There is a lot of synergy that can go on.”

Analysts at Briefing.com said: “Adding EDS would expa