HP (HPQ) Close To $12-13 Billion Deal For EDS (EDS)

Hewlett-Packard (HPQ) is close to a $12-13 billion deal to buy Electronic Data Systems (EDS), the Wall Street Journal reports. An announcement could come as early as tomorrow. WSJ:

A deal would bolster Hewlett-Packard’s competitive position versus rival International Business Machines Corp. (IBM) as a provider of services such as tech consulting and customer support. The transaction could spark further large deals in the technology sector as cash rich, mature companies such as Hewlett-Packard look to acquisitions for growth.

EDS shares are up 27% late Monday, trading around $23.80, while HP shares gave up all of their gains on the news. EDS had an enterprise value of $9.95 billion this morning, according to Yahoo Finance, so a $12-13 billion deal represents a 20-30% premium. EDS made $716 million last year on $22.1 billion of sales.

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.

Tagged In

deals sai-us