Once the leader in the PC industry, Hewlett-Packard (HP) has been hit by some serious hurdles over the last few years culminating in losing the number one PC distributor spot to Lenovo last year.
According to sources from both the Wall Street Journal and Re/Code, current CEO Meg Whitman is planning to revive plans that were shelved in 2011 to split HP up, turning it into two public companies each with more than $50 million (R560 million) in annual revenue.
The PC division, which was bundled with the vastly more profitable unit that sells printers last year, will split off into a company to be known as HP Inc. It will be headed up by current PC division executive Dion Weisler, with HP CEO Meg Whitman acting as chairman with the enterprise, corporate computing and IT services divisions forming a separate company known as Hewlett-Packard Enterprise – Patricia Russo, currently an independent director, will become chairman.
The split is said to be the last resort by Whitman after a series of failed negotiations with several parties to sell of parts of HP with the hopes of creating a leaner company that could focus on more profitable areas in order to improve its financial position. According to Re/Code, HP’s PC business has been shopped around to the likes of both Dell and Lenovo, while its enterprise and server business were also offered to buyers and all with no positive responses.
The one potential merger that had been deep in negotiations before failing was with EMC, a data storage company whose massive 80% stake in the data centre visualisation software VMWare was thought to be the main target for HP. The deal is thought to have fallen through because of the PC division acting as a dead weight to the potential profits of the merger which, if the split does occur, would no longer be an issue to the new enterprise group.
Whether or not the split does happen, it seems that Meg Whitman is looking at every alternative to bring HP back into the limelight, whether or not she will success is still poised to go either way.
[Source – WSJ, RE/Code, Image – włodi on Flickr (CC BY-SA 2.0)]
