Electronic Data Systems (EDS) acquisition approved by the European Commission

by Editor 7/28/2008 4:08:00 PM
IT consultant,ITjobs,computer jobs
Hewlett-Packard announced on Friday that its plans to buy Electronic Data Systems Corp. (EDS) for $13.9 billion have been approved by the European Commission, which serves as the antitrust regulator of the European Union. The EC has not imposed any conditions on the world's leading computer company before approving the acquisition. 

EDS and HP said that the merger would not happen before August 18. EDS has also confirmed that it will pay its Q3 dividend ($0.05 per share) on September 10.

Hewlett-Packard, a company that has about 2.5 billion shares of common stock outstanding, has declared a regular cash dividend (0.08 per share), payable on October 1.

HP's acquisition of EDS was originally agreed upon in May 2008. With EDS under its wing, HP will be able to better compete with IBM on the market of technology consulting, customer support and other services. It has already usurped IBM as the world's leading technology company in terms of revenue.

The deal has yet to be approved by EDS shareholders, who will have a vote on July 31, and to obtain regulatory clearance from other non-U.S. jurisdictions.

If the acquisition is successful, HP is likely to win more government contracts in the future, since EDS is one of the leading government contractors in the technology sector. The deal will also probably more than double HP's services revenue and be the company's biggest acquisition since Compaq in 2002.

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