HP eyes-up EDS for a potential billion dollar deal

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HP eyes-up EDS for a potential billion dollar deal

Hewlett-Packard has confirmed that it is in advanced talks to acquire global IT services company Electronic Data Systems (EDS) in a deal worth billions of dollars.

HP said in a statement it was engaged in advanced discussions with EDS regarding a possible deal for the firm.

However the vendor stated: “There can be no assurances that an agreement will be reached or that a transaction will be consummated. HP does not intend to comment further until an agreement is reached or discussions are terminated.”

US-based EDS’ core portfolio comprises information-technology, applications and business process services, as well as IT transformation services.

In April, EDS reported, in its first quarter 2008 financial results, the company’s revenue increased three percent to US$5.37 billion from US$5.22 billion in the year-ago first quarter. EDS signed US$5.6 billion in contracts in the first quarter of 2008, up 66 percent from US$3.4 billion in the same quarter in 2007. EDS' twelve US$100 million-plus contract signings were the most it has signed in any quarter since 2002.

According to EDS its first quarter earnings for the Asia-Pacific region was US$522 million, up nine percent compared to the prior-year period, due primarily to growth from MphasiS. Operating profit for the same region was US$53 million, up 14 percent from US$47 million in the prior-year period, driven primarily by improved contract performance.

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