HP confirms spin-off plan
HP has confirmed earlier reports that it is to become two separate companies.
The first, which will continue using the name HP, will comprise the printing and PC side of the business. The second, HP Enterprise, will be made up of the enterprise infrastructure, software and services business.
As expected, Meg Whitman will become CEO of HP Enterprise, and become non-executive chairman of the newly formed HP’s board.
Lead independent director of HP, Patricia Russo, will become chairman of HP Enterprise, and Dion Weisler, who is currently executive vice president of HP’s printing and personal systems business, will become CEO of HP.
Current shareholders will hold shares in both new companies once the change is complete.
HP said dividing the company in two will give both new entities greater financial resources and flexibility to react to changing market trends.
Not the first time
This isn’t the first time spinning off the printer and PC business has been mooted.
In August 2011, former CEO Leo Apotheker suggested the company was going to follow exactly this strategy, but just one month later he was booted out by the board and replaced by Whitman.
At the time, the new CEO almost immediately undertook a five-year turnaround plan, distancing herself from Apotheker’s pronouncement, but it seems the company has changed its mind.
In a statement announcing the break-up of HP, Whitman said: “The decision to separate into two market-leading companies underscores our commitment to the turnaround plan.”
A conference call for the investment community will take place at 1pm BST.