Hewlett-Packard, the American computer group embroiled in a legal bust-up over its ill-fated $11 billion purchase of Autonomy, the British software developer, is planning to break itself into two.
The Californian company is proposing to split its personal computer and printer businesses from its corporate hardware and services operations. The move, which could be announced today, is likely to be via a share distribution next year to existing shareholders.
A separation would mark the second big American technology break-up in the space of a week, after last Tuesday’s announcement from eBay that it had bowed to pressure from Carl Icahn, the activist shareholder, to split its auction business from its PayPal payments operation. That was backed by the markets, with the shares jumping 7.5 per cent. Companies are coming under pressure from shareholders to concentrate on a narrower range of businesses in the belief that such focus leads to higher stock market ratings.
HP toyed with the decision to spin off its personal computers operation in 2011, when it accompanied its purchase of Autonomy with news that it was weighing up a demerger. It changed its mind after the shareholder coup that led to the departure of Léo Apotheker as its chief executive.
Meg Whitman, his successor, has restructured the company to combine the PC business with the more profitable printer operation. She is expected to chair the demerged PC and printer business, while becoming chief executive of corporate hardware and services. Sales are split broadly between the two arms of the business, with the printer and PC activities contributing almost $56 billion in revenues last year.
Last year HP lost its position as the world’s leading player by shipments in PCs to Lenovo, of China.
An HP spokeswoman declined to comment on a report in The Wall Street Journal that the company was on the brink of announcing a break-up.