HP to acquire Palm for US$1.2 Billion Tweet

Hewlett Packard (HP) and Palm 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 US$5.70 per share of Palm common stock in cash or an enterprise value of approximately US$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 webOS platform will enhance HP's ability to participate more aggressively in the fast-growing, highly profitable smartphone and connected mobile device markets, the companies said.

Under the terms of the merger agreement, Palm stockholders will receive US$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.

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