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Hewlett-Packard is splitting its business into two separate companies

Hewlett-Packard is splitting in to two companies

HP has announced plans to split its business into two companies, one focusing on PC and Printer and the other focusing on the Enterprise. You probably know Hewlett-Packard (HP) as a Personal Computer (powering countless Windows desktops) and Printer manufacturer. This is the part of HP that will be HP Inc. and retain the logo. In fact, I wouldn’t be surprised if many customers even noticed HP splitting into two.

HP Inc. will be led by Dion Weisler as President and CEO. The split is to give the consumer facing business of the company more flexibility and the ability to bring new technologies like 3D printing to the market quicker. It will be in a better position to a market place with mobile, and connected devices.

The second company being formed is Hewlett-Packard Enterprise. This will be the business focused company. This is also the part of HP you are probably not familiar with. It will house their corporate hardware and services business, and be led by current HP CEO Meg Whitman. Hewlett-Packard Enterprise will be in a position to better tackle a market being dominated by the cloud, big data, and security.

This is not a radical step taken by the company, rather it is year four of the company’s five year ‘turnaround’ plan, led by current HP CEO Meg Whitman. This split is part of the plan and is intended to give both aspects of HP’s business the “flexibility they need to adapt quickly to market and customer dynamics”. Whitman has long spoken of this, especially in relation to the slowness with which HP reacted to the mobile market (anyone still remember their WebOS tablet?).

If you have stock in HP, you probably have a few questions. First, shareholders of HP will own shares in both of the new companies. The transaction is going to be tax-free for shareholders, and will be completed by the end of 2015 with Goldman Sachs & Co. as the financial advisors. Keep in mind, that it is not yet set in stone and final approval from the Board of Directors, and more, is still needed. 

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