Hewlett-Packard Company (HPQ) Looking For Acquisitions


It might be a blessing in disguise for Hewlett-Packard Company (NYSE:HPQ) as it readies itself for a split from November 1, but the company is on the prowl again for acquisitions. The move would allow the company to engage in acquisitions, which it has been shunning for quite a long time. That was mainly because of the $11 billion Autonomy Corp, tie-up disaster. The lesson learned from it would be still in the memory of the management and would make them more cautious.

Focus Areas

In an interview to WSJ, Hewlett-Packard Company (NYSE:HPQ) CEO, Meg Whitman said that the company would focus on next generation data-center equipment and data storage for acquisitions. She said that the company recently initiated steps to boot up a venture investment program that would enable them access hot Silicon Valley startups. She said that they have a chance to provide significant changes. Therefore, the company might either acquire them or provide investment in it. Alternatively, it would integrate them into its solutions.

In respect of hardware, Whitman said that the company acquired Aruba and that it may be interested in some small storage firms. In response to a question on matched-and-tuned hardware packages, she said that there might be some converged infrastructure.

Restructuring Costs

Hewlett-Packard Company (NYSE:HPQ) has already indicated that it would be spending about $3 billion towards structuring of expenses as the deadline for spin off is nearing. The company is in the process of laying off of 55,000 jobs and the chances of more to follow.

The spin-off is expected to be better for both the divisions since they would be focusing on the separate agenda. Whitman said that both the companies would develop different cultures over the time. However, there would not be any changes in its core values. There would be optimization of funds generated and deployed within the companies that would enable them to perform better.

Sanford C Bernstein & Co. analyst, Toni Sacconaghi, said that Hewlett-Packard Company (NYSE:HPQ) commands a good brand value. The company’s scope is wider than the other companies and that would remain a key advantage in the market place.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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