Mulling the 2008 HP-EDS Merger

by: Outsourcing Insider

Keeping abreast of the world is certainly a difficult job, especially now with social media, blogs and other such sources all over the place; it’s becoming difficult to know exactly where to look. I myself have different favored sources of information, including those for news headlines, and social media, that I search regularly. On one such occasion, I came across the Top 10 Business Deals of 2009 from With regards to outsourcing, the item included in the top business deals for 2009 was the HP (NYSE:HPQ), EDS deal.

HP acquired EDS on May 2008 for $13.9 billion, it was listed in 2009 because, even though the deal was made in 2008, it started paying dividends last 2009. This past year, there’ve been lots of different companies signing mergers left and right. With tech companies alone there’s been Xerox (NYSE:XRX) and ACS (ACS) ($6.4B), Dell (NASDAQ:DELL) and Perot Systems (NYSE:PER) ($3.9B) and HP and 3Com (COMS) ($2.7B). And even though this is true, the results of these deals still remain to be seen.

With the HP-EDS deal, the results are already out and going down to the nitty-gritty of it, HP would’ve performed dismally this 2009 if they hadn’t acquired EDS. According to the 4th quarter results of the company for 2009, it was their "solid performance in Services" largely stemming from the EDS merger that allowed the company to attain "record profit."

The acquisition of EDS by HP marked the company’s transition from a product-oriented company into a service provider, and by doing so; HP has managed to acquire more business, placing them right on the heels of the Big Blue, IBM (NYSE:IBM).

With other IT companies largely following in HP’s steps this past year, and still ongoing, prospects for Tech outsourcing companies’ mergers and acquisitions are very high and still climbing. However we’ll all have to wait and see whether the other deals that came through will lead to bigger profits for the corresponding companies this 2010.

By and large, I’d say TIME hit the mark by choosing the HP EDS deal as one of the top business deals of 2009. This deal marked a new direction for outsourcing by tech companies and paved the way for many of the different contracts by HP EDS and other companies that we’ve all been reading about this past year. 2009 could have been a better year for HP EDS, but if you think about it, it could’ve been much worse.

Disclosure: No Disclosure