Hewlett-Packard Co. announced plans on Tuesday to purchase Electronic Data Systems Corp. for $13.9 billion.
EDS has about 2,200 employees in the D.C. area, with an office in Herndon, according Bob Brand, corporate public relations director for EDS. EDS’ Washington operations focus primarily on federal services business.
EDS will retain its name and will be considered an HP company. EDS’ headquarters will remain in Plano, Texas, and its chairman, president and chief executive officer, Ronald A. Rittenmeyer, will still be in charge. He will join the executive council of HP, headquartered in Palo Alto, Calif.
“I don’t anticipate changes in organizational structure,” said Brand.
HP, however, is planning significant layoffs, although HP CEO Mark Hurd and Rittenmeyer wouldn’t give specifics during a media and analyst conference call.
“There’s going to be a lot of integration planning that goes on over the coming months. It’s too early to speculate on the impact on employee head count,” said Brand.
HP also has sales and service offices in D.C., Baltimore, Rockville, Lanham, Falls Church and Reston, according to its Web site. HP spokesman Ryan Donovan declined to comment on the total number of HP employees in the area, citing only a global count of 172,000 employees. Donovan also declined to comment on whether the services provided by EDS’ and HP’s D.C.-area offices overlap, and whether this might lead to layoffs.
EDS shareholders will receive about $25 per share in cash in the agreement, which was unanimously approved by the HP and EDS boards of directors. The $13.9 billion figure is the enterprise value of the transaction, including assumed debt. Overall, the deal is worth about $13.2 billion, according to HP.
The deal is expected to close sometime in the second half of this year. HP expects its technology services revenue to more than double to over $38 million; its own unit had $16.6 billion in revenue in fiscal 2007, and EDS had $22 billion in the same period.
“The combination of HP and EDS will create a leading force in global IT services,” said Hurd.
The AP contributed to this story.
