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HP Tipped To Buy EDS To Level Playing Field with IBM: WSJ

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HP Tipped To Buy EDS To Level Playing Field with IBM: WSJ

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Hewlett-Packard is supposed to be thisclose to buying Electronic Data Systems for somewhere in the heady neighborhood of $12 billion-$13 billion, according to the Wall Street Journal, a pretty premium over its $9.5 billion market cap Friday.  

The paper thinks there could be an announcement tomorrow.  

Buying the consultant is meant to help HP compete on the services side against rival IBM.  

HP did about $16.6 billion in services last year and earned $1.8 billion on it. EDS had revenues of $5.8 billion.  

IBM did about $57 billion in services, earning $5.6 billion.  

HP hasn’t spent the kind of money they’re talking about since it bought Compaq for $20 billion. It would be CEO Mark Hurd’s biggest buy since he arrived at HP.  

The company bought Mercury Interactive for $4.5 billion in 2006.  

During her sojourn at HP, Carly Fiorina tried to PriceWaterhouse’s consulting arm for a reported $19 billion and failed. IBM later picked it up for a song.  

HP reports its latest quarter on Thursday.


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