HP to split into two companies

October 6, 2014 // 11:16 a.m.

Tags: #autonomy #bill-hewlett #compaq #dave-packard #hewlett-packard #hp #leo-apotheker #meg-whitman #palm #webos

Hewlett Packard (HP) is reportedly planning to split itself in twain, creating separate companies to handle the personal computer and printing market and the enterprise hardware and services market.

Founded way back in 1935 by Stanford University graduates Bill Hewlett and Dave Packard, HP was an early creator of electronic lab equipment but would become best known in modern life for its printer products. Following years of acquisitions and mergers, HP grew and grew but struggled to digest some of its more recent divisions. The merger with one-time rival Compaq in 1998 went reasonably well, but $1.2 billion spent to acquire palmtop computing pioneer Palm in 2010 was a major misstep: the company's flagship operating system, webOS, would appear in one HP-branded smartphone and one ill-fated tablet computer which HP would cancel and rid itself of in a fire-sale before its shrink-wrapping had even cooled before killing off the webOS and Palm divisions altogether.

If the Palm acquisition was a débâcle, then HP's purchase of big-data specialist Autonomy at a near-80 per cent markup was nothing short of a disaster. In 2012 HP was forced to write down $9 billion as a result of the acquisition, following years of declining stock price and thousands of job losses. Clearly, something needs to change at the company - and sources indicate that it is dusting off a plan from ousted chief executive Léo Apotheker and splitting the company into two distinct entities.

According to unnamed sources speaking to the WSJ, HP is to split into two new companies: one to take the company's personal computing and printer businesses, including its tablet and smartphone product lines; the other to take its enterprise hardware and services businesses. These two entities will be entirely separate, with the move coming as the company's share prices have been steadily increasing in the last twelve months following years of decline.

Hewlett Packard has yet to comment on the claims, but is rumoured to be announcing the move later today.

UPDATE:
HP has officially confirmed the rumours, with full details to be released during a now-postponed investors' meeting.
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