CHINA TOPIX

11/22/2024 12:52:07 pm

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Hewlett Packard Acquires Aruba Networks for $2.7 Billion

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(Photo : Reuters) HP has unveiled its Omen line of gaming devices.

Hewlett Packard has announced the acquisition of Aruba Networks -- maker of wireless networking services for public places -- in a $2.7 billion all-cash offer.

Including paying --off Aruba's current debt, HP will be spending $3 billion on the acquisition. Aruba investors will receive $24.67 per share in the deal, $0.21 higher than the current $24.45 stock price.

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It's one of the first large scale acquisitions from HP since Chief Executive Officer Meg Whitman took over the company in 2011. Part of Whitman's job was to bring back HP through large scale cutbacks and a revamped portfolio, meaning there was not a lot of time for hiring more employees.

The acquisition of Aruba gives HP an easy way to develop the networking market by offering public Wi-Fi networks to mall owners, stores, hospitals and schools. The market growth in China points to promising things and HP clearly doesn't have faith in its own enterprise sector to establish deals in the region.

Investors do worry that HP's large scale acquisition of Aruba, a low-profit company, might not be the best expenditure for the cost since it will add 1,200 employees to the HP payroll (unless Whitman intends to remove some of the active staff).

The deal follows a rather poor quarter from HP that comes a few months before the eventual split between HP's hardware and software division. Aruba Networks will most likely go with the software and services once the split is completed sometime this year.

HP Inc will incorporate most of the consumer business, including computers and printers, while HP's enterprise division will focus on software, services and enterprise contracts.

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