HP splits in two
HP is to divide itself into two companies. Hewlett-Packard Enterprise will take over HP’s enterprise technology infrastructure, software, and services businesses. The other will focus on personal systems and printing. It will be called HP Inc, and it will retain the current logo.
The process will not be completed until the end of October 2015, at which time shareholders in what is currently HP will own shares in both Hewlett-Packard Enterprise and HP Inc.
Like other high-tech companies, HP has had difficulties adjusting to the fast pace of change in consumer electronics and computing technology. Even its attempts to build its profile in business and enterprise computing have become mired in controversy, most notably with the acquisition of the UK software house Autonomy.
Autonomy specialised in analysis of large scale unstructured big data and in 2011, on the initiative of Léo Apotheker HP's then CEO and President, HP paid $10.3 billion for 87.3 per cent of the shares, valuing Autonomy at around $11.7 billion (£7.4 billion) overall, a premium of around 79 per cent over market price. A year later, HP wrote off around $8.8 billion relating to the acquisition.
Since her appointment as CEO in September 2011, Meg Whitman, Chairman, President and Chief Executive Officer of HP, has been leading a five-year turnaround plan. In announcing the demerger, she said: 'Our work during the past three years has significantly strengthened our core businesses to the point where we can more aggressively go after the opportunities created by a rapidly changing market.'
The aim of the split is to provide each new company 'with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders.'
Whitman will remain President and Chief Executive Officer of Hewlett-Packard Enterprise, while Cathie Lesjak, Chief Financial Officer of HP, will join Whitman in that position in Hewlett-Packard Enterprise.
Dion Weisler, Executive Vice President of HP’s Printing and Personal Systems business, will lead HP Inc. as President and Chief Executive Officer. Whitman will serve as non-executive Chairman of HP Inc.’s Board of Directors.
Hewlett-Packard Enterprise will focus on technology infrastructure, software, and services to allow customers to take full advantage of the opportunities presented by cloud, big data, security, and mobility in IT.
'Over the past three years, we have reignited our innovation engine with offerings for the enterprise like Apollo, Gen 9 and Moonshot servers, our 3PAR storage platform, our HP OneView management platform, our HP Helion Cloud and a host of software and services offerings in security, analytics, and application transformation,' continued Whitman.