HP Buys Palm: Hewlett Packard Acqurie Palm

by NowPublic Staff | April 28, 2010 at 12:56 pm

77 views | 0 Recommendations | 0 comments

Hewlett-Packard Co. Buys Palm Inc: $1.2 Billion

Hewlett-Packard jumped into the mobile device and smart phone market on Wednesday with its $1.2 billion acquisition of Palm Inc- paying a 23% premium for Palm shares.

Under the deal approved by the two companies' boards of directors, HP will pay $5.70 cash per share of Palm, a 23 percent premium to its closing price on Wednesday of $4.63.

Palm's current chairman and CEO, Jon Rubinstein, is expected to remain with the company, HP said in a statement, adding that it expects the acquisition to close during its third fiscal quarter ending July 31.

Palm once a leader in the mobile device market was attempting to make a come back with its new device the Palm Pre but the Palm Pre's sales lagged behind the the iPhone an Blackberry devices. On now with new blizzard of Android devices from HTC and Motorola the prospect from Palm were even more bleak.

With HP buying Palm the computer maker gets a boost into the grown mobile computing market. Dell recently started selling smart phones and now it seems so will Hewlett-Packard, more specifically, it will attempt to leverage the Palm Operating System (OS).

Palm’s innovative operating system provides an ideal platform to expand HP’s mobility strategy and create a unique HP experience spanning multiple mobile connected devices,” Todd Bradley, executive vice president of H-P’s personal systems group, said in a statement. “The smart phone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market.”