HP splits into two separate companies

Hewlett-Packard, a company, more commonly referred to as HP, splits into two separate companies. The American multinational information technology corporation has split its PC and printing division from its software, servers and data storage business.

According to a source close to the company, HP’s decision to split itself into two separate companies might result in a tax-free distribution of shares to the shareholders of HP in 2015. Here, it must be noted that the company has not taken this decision unexpectedly; HP along with its analysts and investors are contemplating this move since a long time.

The news of HP’s split has come at a time when most experts believe that to deliver better performance a business must have a narrower focus. This belief of experts has resulted in breaking up and spinning off of a number of technology companies; and we have to admit that in most cases these changes has brought is good news for those firms. In the majority of the cases, the split-ups have made shareholders happy, even if they were not convinced initially.

Last Tuesday ecommerce company eBay announced that it is planning a spin off for its online money transfer unit PayPal. Shareholders of eBay rewarded this decision by taking the company’s shares up by around 7.5% that day. We’ll have to wait for some more hours to find out whether something similar happens to HP with the decision of the split-up announced.

News is suggesting that HP is looking to break up its thriving PC operation also made headlines in 2011. This was the time when the American company announced that is has acquired Autonomy Corp, a software company headquartered in the UK. When announcing the acquisition, HP also said that it is considering separating its popular PC business. However, nothing like that finally happened as pressurized by shareholders, Léo Apotheker, the then CEO of the company, had to depart and HP decided to reverse its previous decision and stick to its old business format.

In 2012, under the leadership of its current chief executive officer Meg Whitman, HP prepared itself to merge its PC operation with its highly profitable printer business.

It seems that top professionals working at HP will occupy the biggest positions in the two newly formed companies.

According to information obtained from reliable sources, after today’s split, Whitman will continue to operate as the company’s chairman for its printer and PC business and as the CEO of HP’s separate software, servers and data storage business. The printer and PC business will have Dion Weisler as its CEO; Weisler was originally an executive of HP’s printer and PC operation. The software, servers and data storage business, on the other hand, will have Patricia Russo, who used to be the lead independent director of HP, as chairman.

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