HP, EDS mull local merger

By Leon Engelbrecht for HP
Johannesburg, 29 Aug 2008

Hewlett-Packard (HP) SA and the local business of Electronic Data Systems (EDS) still have some way to go before they can join their parents in a global merger.

HP this week announced its $13.9 billion buyout of EDS, founded by former US presidential candidate H Ross Perot, is complete.

HP chairman and CEO Mark Hurd, in a statement released in the US, said the moment was "a historic day for HP and EDS and the clients we serve".

US publication InformationWeek describes the deal as "the largest in the outsourcing sector's history, and the second largest in the IT industry overall".

"It's second only to HP's $19 billion buyout of computer maker Compaq in 2002," it adds.

HP Technology Solutions Group's SA country manager, Oliver Fortuin, says although the deal has closed globally, "for SA there is still work to do before we are able to finally close".

Fortuin says it is difficult to comment further on HP's plans for EDS in SA. "My expectation is that in the next two to three weeks we will have a much clearer view on... what the next steps will be for us locally."

HP SA services director Hansjoerg Walz previously said both companies are for now continuing business as usual.

Walz said he expected the merger to be similar to the Compaq-HP marriage.