Hewlett-Packard has agreed a US$1.2bn deal to acquire US based smartphone maker Palm.
HP is taking over Palm in a US$5.70 per share deal, stating that its global scale and Palm’s webOS platform will enable it to get further involved in the smartphone and…
Hewlett-Packard has agreed a US$1.2bn deal to acquire US based smartphone maker Palm.
HP is taking over Palm in a US$5.70 per share deal, stating that its global scale and Palm’s webOS platform will enable it to get further involved in the smartphone and mobile device market.
Following deal closure, Palm chairman and CEO Jon Rubinstein is expected to remain with the company.
Palm is listed on the Frankfurt Stock Exchange, with shares at one point rising as much as 25% to E4.43 (US$5.90). Some analysts have said that HP has the necessary funding and Palm the right products, and that therefore the deal makes sense.
Dave McQueen, principal analyst at Informa Telecoms & Media, said of the deal: “The acquisition of Palm seems to be a good fit for HP, however it will be interesting to see how the combined organisation will operate, particularly as neither HP’s Windows Mobile business focused devices nor Palm’s webOS handsets have been particularly successful in the mobile handset market. I’m not convinced the Palm devices will add much to HP’s portfolio (relatively poor sales, build quality, etc.)….Traditionally, HP has a very good distribution network that will help channel to market but it will need to work closely with mobile operators, a weakness of Palm’s, in order to succeed.”
The transaction is expected to close in Q3 2010, subject to regulatory clearance.