The legendary American multinational information technology corporation Hewlett-Packard is finally on the verge to become two companies.
The separation will occur by a tax-free distribution of shares to stockholders next year.
The company that was founded in a one-car garage in Palo Alto by William “Bill” Redington Hewlett and Dave Packard will now work separately on the firm’s computer and printer businesses, and the business hardware and service operations.
The move follows the flow of wave of breakups of technology companies. On September 30, eBay announced it would spin off PayPal.
The long time leading PC manufacturer of the world was overtaken by China’s Lenovo Group Ltd. last year.
The corporation headquartered in Palo Alto, California, United States, will be announcing the big news to the earliest on Monday.
In fiscal 2013, the printing and personal systems group, alone accounted for half of the total revenue i.e. $55.9 billion in revenue. HP’s growth gives the picture of profit potential in its printer business.
HP has been making efforts to concentrate on more gainful operations of providing computer servers, networking and data storage to businesses. Agilent Technologies got separated from HP In 2001, along with the test and measurement equipment business- HP’s first line of business. Earlier in 2011 HP CEO at that time Leo Apotheker thought of turning off its PC division but ultimately it didn’t come in play.
Under current H-P CEO Meg Whitman, H-P restructured and combined the PC business with its more profitable printer operation in 2012.
Whitman will serve as the CEO of the enterprise-company, and current HP lead independent director Patricia Russo will be chairman.
The PC/printer firm will have Whitman as the chairman, and executive of the division, Dion Weisler as the CEO.
H-P shares mark a raise of 2% Friday to $35.20, giving it a market capitalization of nearly $66 billion.
Lately HP’s commercial business has been diminishing at an alarming rate so distracting its consumer side from its enterprise side might let the firm figure out how to beat their rivals.