The Wall Street Journal on Sunday reported that Hewlett-Packard Co has plans to split itself into two companies, one to focus on enterprise computing, hardware and services while the other to deal purely with PCs and printers businesses.
The Journal referring sources familiar to the matter reported that HP plans to make the announcement as early as on Monday with the division made to stockholders next year through a tax-free distribution of shares.
However, HP declined to comment on this report.
HP’s enterprise-focused company’s CEO will be Meg Whitman, present HP CEO who will lead the company and also would serve as the chairman for the PC and printer business company. On the other hand the PC and printer company will have Dion Weisler as its CEO while Patricia Russo will take up the chairman duties of the enterprise company.
According to the newspaper, HP along with some of its investors has considered such a move for a long time. Being one of the largest computer companies, HP directors for several years were in discussion to restructure the company to go about with the technology upstarts.
On close note it can be understood that this isn’t the first time HP is considering to split itself. Early in 2011 under former CEO Leo Apotheker, HP tried exploring the possibility of spinning off its PC business. Shareholders were not convinced with the plan that resulted in costing Leo Apotheker’s job. In September 2011, eBay’s former chief – Whitman replaced Leo Apotheker officially.
In the past company split-ups, shares of new divisions were spun off to stockholders that resulted giving higher stock market returns for investors.
Many investors and analysts to have HP focus more on its profitable operations like providing computer networking, servers and data storage to businesses, wanted either a break-up of the company or a sale of the personal computer business.
It was the company executives who said that the personal computers in the past underpin and support the company as a whole. In recent quarters, the PC business has grown geographically broadly.
If the split happens then, joining the increasing list of companies splitting or getting slim down otherwise would also be HP, the world’s second largest PC vendor. Toshiba, last month informed that it to focus more on business clients plans to rip off select consumer PC markets. While on the other hand eBay has informed to spin off its PayPal as a separate company by next year.
It has become a belief in the present corporate world that to perform better, a leaner company with a narrower focus is a must. And for this even shareholders support these kinds of steps while at cases they even request for it.
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