HP Plans to Split into Two Companies
According to a Wall Street Journal report published Sunday, the American technology major Hewlett-Packard, is planning to split itself into two companies in order to focus on its faster-growing businesses.
Under the reported plan, HP will separate its computer and printer businesses from its corporate hardware and services operations, and spin off the unit through a tax-free distribution of shares to stockholders next year.
The move could be announced as early as Monday. After the split, Meg Whitman, company's CEO will stay with both the companies, though her priority would be to serve as CEO of the enterprise side. She will also be a non-executive chair of the printing/personal computing company.
The report also stated that the current HP lead independent director Patricia Russo would be chairman of the enterprise company. The CEO of the PC and printer company would be Dion Weisler, who is currently an executive in that division.
According to last quarter's financial results, HP's printing and personal computing business accounts for about half of its revenue and profit. In August, HP reported a sharp fall in profit despite a rise in revenue by improved PC sales.
HP was founded by Bill Hewlett and Dave Packard in a Palo Alto, California garage in 1939 and currently has more than 300,000 employees globally. It was the world's largest computer company that shaped Silicon Valley and the PC revolution, though there has been much turmoil in recent years. Lately, the company has struggled to adapt to the shift towards mobile computing.
HP has also been involved in a continuing legal dispute with Autonomy, a British company it bought for $11.1bn in 2011.
The company has been under pressure from newer rivals such as Chinese firm Lenovo, which overtook HP as the world's largest PC maker in 2012. Third-ranked US rival Dell was taken private last year by founder Michael Dell.
According to the Wall Street Journal, HP and some of its investors have long considered such a move, and the directors have discussed ways to restructure to keep up with technology upstarts. In 2011, HP did consider spinning off its PC division under then-CEO Leo Apotheker, but went against the idea.
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