HP is considering buying IT outsourcing firm EDS for as
much as £6.5bn, according to The Wall Street Journal.
HP wants to expand its services business, and EDS has struggled
of late to deliver good returns on some major US and UK government
contracts. Last September,
EDS said it would be shedding a further 12,000 staff.
After news of HP's move leaked, both companies issued similar
statements confirming the possibility of a deal, but neither spelt
out whether it was a straight acquisition on the table.
HP said it was "engaged in advanced discussions with Electronic
Data Systems regarding a possible business combination involving
the two companies".
It said, "There can be no assurances that an agreement will be
reached or that a transaction will be consummated. HP does not
intend to comment further until an agreement is reached or
discussions are terminated."
EDS said, "In response to market rumours, Electronic Data
Systems is in advanced discussions regarding a possible business
combination transaction with Hewlett-Packard.
"There can be no assurance that a definitive agreement will be
entered into."