HP to rival IBM in EDS acquisition

Global - HP has acquired Electronic Data Systems (EDS) for US$13.9 billion, creating an alliance that rivals IBM in the global IT services sector.

HP said it acquired EDS for approximately US$13.9 billion. The deal will see HP establishing a new business group, EDS - an HP company, headquartered at EDS's existing executive offices in Plano, Texas. The new company will continue to be headed by EDS chairman, president and CEO Ronald A Rittenmeyer, who will join HP's executive council and report to Mark Hurd, chairman and CEO of HP.

"The combination of HP and EDS will create a leading force in global IT services," Hurd said in a statement. "Together, we will be a stronger business partner, delivering customers the broadest, most competitive portfolio of products and services in the industry. This reinforces our commitment to help customers manage and transform their technology to achieve better results."

The acquisition is expected to give HP a boost in its competition against IBM for a larger slice of the IT services market. Last year, IBM's technology services division drew US$54 billion in revenue, while the acquisition is expected to "more than double HP's services revenue, which amounted to US$16.6 billion in fiscal 2007," HP said in a release.