HP agreed to buy EDS for USD 13.90 billion

Hawlett Packard, has agreed to buy EDS for USD 13.90 billion or at $25 per share. The world’s largest personal-computer maker will buy technology outsourcing company Electronic Data Systems in all cash deal. On this news EDS stock was up 28% yesterday

HP said the transaction will be accretive to ‘09-’10 non-GAAP earnings. This deal will be completed in the H2 FY09. The transaction will more than double HP’s revenues from services. EDS will continue to be led by RA Rittenmeyer.

HP which holds 60% in Mphasis software India said it is not seeing any negative implications. In fact, it is seeing more business from MphasiS. The Indian company sees a lot of business potential from the HP-EDS combination. HP-EDS will have a 7% market share of the USD 500-550 billion IT services market. Its strong BPO capability is a positive for MphasiS.