HP Set to Buy EDS

Palo Alto, Calif. — Personal computer and printer maker Hewlett-Packard (HP) reportedly is nearing a deal to buy information technology services provider Electronic Data Systems (EDS) for between $12 billion and $13 billion.

Today’s Wall Street Journal reported the talks on its Web site. The online version of the newspaper said the acquisition could be announced as early as Tuesday.
Both HP and Plano, Texas-based EDS didn't immediately respond to messages, according to the Associated Press.

HP’s news comes on the heels of its Exstream Software acquisition, adding document management software to the company’s printing portfolio.

Buying EDS would give Palo Alto-based HP more tools to compete against IBM in the lucrative field of technology consulting and customer support. EDS brings with it its 1997 acquisition of Solcorp (founded in 1980 as CAPSCO Software Canada Ltd.).

In the insurance sector, the deal, when viewed with its other recent acquisitions, would cap the company’s quest for services and software.

"HP's purchase of EDS gives them the strong services organization that they've been looking for for a while,” says Matthew Josefowicz, director of the insurance practice at New York-based Novarica. “Incidentally, it also gives them a significant foothold in the life/annuity policy administration space with Solcorp. Combined with their recent purchase of Exstream, HP seems to be on its way to becoming a bigger player in the insurance applications space."

Source: Associated Press