October 7, 2014
HP’s official announcement came after reports over the weekend that the split would occur, and which The Recycler reported on yesterday. The two new companies will be “industry-leading” businesses, says HP, and the decision is a “strategic step” taken to provide both with “the focus, financial resources and flexibility to adapt quickly to market and customer dynamics, while generating long-term value for shareholders”.
The PC and printing side, HP Inc., will be run by Dion Weisler as President and CEO, whilst Meg Whitman will be President and CEO of Hewlett-Packard Enterprise, the software and services side. HP Inc. will aim to deliver “innovations that will empower people to create, interact and inspire”, whilst Hewlett-Packard Enterprise will “define the next generation of technology infrastructure, software and services for the new style of IT”.
Whitman will also be Chairman of the HP Inc. board, with this company focusing on 3D printing and “new computing experiences” alongside PCs and printers, and retaining the HP logo. HP shareholders will own shares in both companies, with the transaction, “expected to be completed by the end of fiscal 2015 […] intended to be tax-free to HP’s shareholders for federal income tax purposes”. The OEM noted that HP Inc. will be able to take advantage of “strong profitability and free cash flow” in order to invest in new technologies.
Whitman stated: “Our work during the past three years has significantly strengthened our core businesses to the point where we can more aggressively go after the opportunities created by a rapidly changing market. The decision to separate into two market-leading companies underscores our commitment to the turnaround plan.
“It will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders. In short, by transitioning now from one HP to two new companies, created out of our successful turnaround efforts, we will be in an even better position to compete in the market, support our customers and partners, and deliver maximum value to our shareholders.”
Weisler added: “This is a defining moment in our industry as customers are looking for innovation to enable workforces that are more mobile, connected and productive; while at the same time allowing a seamless experience across work and play. As the market leader in printing and personal systems, an independent HP Inc. will be extremely well positioned to deliver that innovation across our traditional markets as well as extend our leadership into new markets like 3D printing and new computing experiences – inventing technology that empowers people to create, interact and inspire like never before.”
Categories : World Focus