HP Announces Intent to Acquire Palm for $1.2 Billion

HP announced today that they have entered into an agreement to purchase Palm, pending regulatory approval. The deal is valued at approximately $1.2 billion and has been approved by both Palm and HP boards of directors and is expected to close in HP’s 3rd quarter ending in July 2010. While this sounds like a great deal, one has to wonder if Palm will suffer the same fate as the iPaq did when HP acquired Compaq many years ago.

Of course, there is hope that this could be a match made in heaven. For Palm, the influx of money and manufacturing knowledge and resources is a huge asset. For HP, it provides them with an OS that they can grow across multiple devices and platforms. Palm has been doing some good things with their WebOS over the last year and they have a very loyal following. So it will be interesting to see if HP can keep the momentum rolling.

The complete press release is below. Take a look and share you thoughts with us. Are you interested in buying an HP Palm Smartphone?

HP and Palm, Inc. (NASDAQ: PALM) today announced that they have entered into a definitive agreement under which HP will purchase Palm, a provider of smartphones powered by the Palm webOS mobile operating system, at a price of $5.70 per share of Palm common stock in cash or an enterprise value of approximately $1.2 billion. The transaction has been approved by the HP and Palm boards of directors.

The combination of HP’s global scale and financial strength with Palm’s unparalleled webOS platform will enhance HP’s ability to participate more aggressively in the fast-growing, highly profitable smartphone and connected mobile device markets. Palm’s unique webOS will allow HP to take advantage of features such as true multitasking and always up-to-date information sharing across applications.

“Palm’s innovative operating system provides an ideal platform to expand HP’s mobility strategy and create a unique HP experience spanning multiple mobile connected devices,” said Todd Bradley, executive vice president, Personal Systems Group, HP. “And, Palm possesses significant IP assets and has a highly skilled team. The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market.”

“We’re thrilled by HP’s vote of confidence in Palm’s technological leadership, which delivered Palm webOS and iconic products such as the Palm Pre. HP’s longstanding culture of innovation, scale and global operating resources make it the perfect partner to rapidly accelerate the growth of webOS,” said Jon Rubinstein, chairman and chief executive officer, Palm. ”We look forward to working with HP to continue to deliver industry-leading mobile experiences to our customers and business partners.”

Under the terms of the merger agreement, Palm stockholders will receive $5.70 in cash for each share of Palm common stock that they hold at the closing of the merger. The merger consideration takes into account the updated guidance and other financial information being released by Palm this afternoon. The acquisition is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of Palm’s stockholders. The transaction is expected to close during HP’s third fiscal quarter ending July 31, 2010.

Palm’s current chairman and CEO, Jon Rubinstein, is expected to remain with the company.

About Mike Temporale

Mike Temporale has written 614 posts on Mobile Jaw..

Mike Temporale grew up fascinated by computers since an early age. His first hands on with a computer came when he was 7 years old and a travelling lab of Commodore PET computers made a stop at his school. Hooked on the new world these devices offered, he took any chance possible to get in front of a computer. When Compaq launched the iPaq 3600, he was hooked again. This time on a whole new world of mobile computing. Today, Mike spends his day helping clients deploy and manage their mobile device around the world. From installing custom software, to locking and securing data, and everything in between. He is also the Editor in Chief at Mobile Jaw - a site focused on today's mobile world.

  • http://www.twitter.com/DarrenHumphries Darren Humphries

    Holy Shnikies!!! Didn’t see that one coming personally. I can see this working out nicely, but HP has actually had horrible success in smoothly transitioning acquisitions. My guess is that Jon Rubinstein will not make this one an easy one. Pretty sure he will see this as a merger of equals. ;)

    Hey Jon, if you read MobileJaw (and why wouldn’t you!) I’m just kidding man!

    /aside I’m not kidding.

    /thumbsupatJon

  • http://twitter.com/mobilejaw/status/13047533549 MobileJaw

    HP Announces Intent to Acquire Palm for $1.2 Billion – http://tinyurl.com/26qrcbc

  • http://twitter.com/darrenhumphries/status/13047757741 Darren Humphries

    I was out of touch and missed this news!! RT @MobileJaw: HP Announces Intent to Acquire Palm for $1.2 Billion – http://tinyurl.com/26qrcbc