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Local effect of HP deal next year

Johannesburg, 10 Nov 2006

The local impact of HP's buyout of Mercury is only likely to be felt during the first quarter of next year.

HP said this week it had completed its $4.5 billion takeover of Mercury, which it says is the largest software acquisition in its history. The acquisition is expected to increase the size of HP's software business to more than $2 billion in annual revenue, the company previously said in a media statement.

Mercury alliance director of sub-Saharan Africa, Lenore Kerrigan, says it will be business as usual at the company until about February. The nuts and bolts of the integration process are likely to unfold over the next few months.

Kerrigan says a series of meetings will be held to set out the process going forward, and by February, all the players will have a clearer view.

The South African division of Mercury, because of its streamlined structure, is unlikely to pose any challenges in terms of integration, she adds.

Growth driver

Kerrigan says software is a huge growth area and there is a multitude of opportunities in terms of cross-pollination of skills between Mercury and HP's Open View.

In a statement released this week, HP CEO and chairman Mark Hurd said: "Software is an important driver of growth for HP, and we are delighted that Mercury's products, people and customers are joining the new HP Software organisation."

The deal, said the company, integrates Mercury's application management and delivery and IT capabilities with HP's portfolio of management solutions to create a new HP Software organisation that it hopes will lead the industry in business technology optimisation.

HP SA declined to comment further this week, saying it was premature to remark on the local changes. However, at the time of the initial announcement, Claude Ibalanky, head of corporate communications for HP SA, noted that previous experience with HP acquisitions showed the integration of HP SA and Mercury would likely result in increased opportunities, instead of job losses.

Related stories:
HP wraps up Mercury deal
HP buys Mercury for $4.5bn

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