Hewlett-Packard's services sales will more than double from fiscal 2007 after its acquisition of EDS with combined yearly revenues of $38 billion, the company said on Monday.
The combined firm will offer information technology and business services.
HP, which alone had revenue of $16.6 billion in fiscal 2007, will be competing against IBM, which generated $54.1 billion in services sales in 2007. Last year, IBM had $36.1 billion in global technology services sales and $18 billion in business services sales.
HP will be paying EDS $13.9 billion for the company, or $25 per share. That is a 33 percent more than the price of EDS shares on May 9. Together, the companies will have 210,000 employees in more than 80 countries.
HP said it will establish a new business group using the 'EDS – an HP company' brand. That will be headquartered at EDS' current Plano, Texas executive offices.
The chief executives of both companies say customers will benefit from the bigger size of the company.
The services to be offered by the combined company are:
IT outsourcing, including data center services, workplace services, networking services and managed security; business process outsourcing, including health claims, financial processing, CRM and HR outsourcing; applications, including development, modernization and management; consulting and integration; and technology services.
Other competitors in the same fields are Accenture Ltd, Computer Sciences Corp, Infosys Technologies Ltd, Tata Consultancy Services Ltd and Cognizant Technology Solutions Corp.