HP today announced plans to separate into two new publicly traded companies. One will include HP’s enterprise technology infrastructure, software and services businesses, which will do business as Hewlett-Packard Enterprise, and the other will include HP’s personal systems and printing businesses, which will operate as HP Inc. and retain the current logo.
The announcement comes as HP approaches the fourth year of its five-year turnaround plan.
“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,” said Meg Whitman, HP chairman, president and CEO, in a statement released by the company.
“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.”
Following the transaction, which is expected to be completed by the end of fiscal 2015, HP shareholders will own shares of both Hewlett-Packard Enterprise and HP Inc. The transaction is intended to be tax-free to HP’s shareholders for federal income tax purposes.
Management Structure at Hewlett-Packard Enterprise
Meg Whitman, president and CEO of HP, and Cathie Lesjak, CFO of HP, will hold these positions with Hewlett-Packard Enterprise. When the separation is complete, Whitman will also serve on the Board of Directors of Hewlett-Packard Enterprise, and Pat Russo will move from lead independent director of HP to chairman of Hewlett-Packard Enterprise.
“Over the past three years, we have reignited our innovation engine with breakthrough offerings for the enterprise like Apollo, Gen 9 and Moonshot servers, our 3PAR storage platform, our HP OneView management platform, our HP Helion Cloud and a host of software and services offerings in security, analytics and application transformation,” said Whitman. “Hewlett-Packard Enterprise will accelerate innovation across key next-generation areas of the portfolio.”
The HP announcement is available here.