HP to buy EDS for about $12.6 billion in cash

Source: Associated Press

SAN FRANCISCO - Hewlett-Packard Co. has agreed to buy Electronic Data Systems Corp. for about $12.6 billion in cash to build a technology-services company that could challenge IBM. ADVERTISEMENT

The companies said Tuesday their boards had unanimously approved the deal, in which EDS shareholders would get $25 per share. That is a premium of almost 25 percent over what EDS had been trading on Friday. Word of the talks emerged Monday.

It would be HP's biggest deal in six years.

HP is the world's largest maker of personal computers, while Texas-based EDS provides technology services to the governments and companies around the world.

Read more: http://news.yahoo.com/s/ap/20080513/ap_on_hi_te/hp_eds

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Some may remember EDS as the company founded by Ross Perot. He sold it in 1984 to General Motors. GM spun it off into its own company in 1996.

Are jobs usually cut? I am a bit worried as my husband has been with EDS for 23 years. He was offered early retirement last year, but there is no way we could afford medical insurance. That is, if I could even get it, given my history.

Where the two companies overlapped, they picked one and killed the other. In business PCs, Compaq was better, so bye-bye went the HP Vectra, and everyone who worked on it. Same with the HP handhelds--now its all run out of ex-Compaq turf in Houston.

I think HP is in general a good company (better now that KKKarly's gone), but the only reason these M&As happen is because the shareholders of both companies (but particularly the company being acquired) think they can make more (money) with less (costs, which means people). HP also has unfortunately gone through a number of rounds where they offer early retirement to folks, so the best, most experienced people end up leaving. Usually the remaining people just have to work harder and longer, but if they do hire, they can hire at the bottom of the experience/pay scale to replace the folks that bailed off the top.

What a way to run a railroad...