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Oct 06 2014

HP Breaks Up

Following first rumors that spread over the weekend, the PC and server market leader has officially announced plans to separate into two public companies. The idea behind the move is to disconnect the company's PC and printer divisions from its server, storage, networking, software and services business in order to "provide each new company with the focus, financial resources and flexibility to adapt quickly to market and customer dynamics while generating long-term value for shareholders."

The decision comes as a near-final step in HP's five-year turnaround plan devised by CEO Meg Whitman, her staff and advisors after she took office in 2011. According to HP's press release, the two new units – called Hewlett-Packard Enterprise and HP Inc., respectively – are expected to be strong enough to maintain positions on the Fortune 50 list. HP expects to complete the separation by the end of October 2015.

Hewlett-Packard Enterprise will comprise HP's enterprise technology infrastructure, software and service businesses and be led by President and CEO Meg Whitman and CFO Cathie Lesjak, who currently hold the same positions at the "big" HP. Joining these two will be Pat Russo, who serves as Chairman and quits his job as Lead Independent Director of HP. Whitman for her part will also obtain a seat on Hewlett-Packard Enterprise's Board of Directors.

HP Inc. will comprise HP's personal systems and printing businesses and retain the current logo. Dion Weisler, who has served as Executive VP of this branch since June 2013, will be promoted to President and CEO of HP Inc. However, he'll still be reporting to Meg Whitman, who holds a position as non-executive Chairman on the company's board.

For more info, including financial details, please refer to the press release or see the reports at The Inquirer and GigaOM. HP's announcement comes amidst speculations about a possible merger with EMC, which first appeared some two weeks ago in the Wall Street Journal.

 
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