HP would plan to split up: the business unit that deals with PCs and printers would be separated from the business IT and services division. Attempts to sell those two parts would have failed.
HP would announce its split plan on Monday, both Re/code and WSJ said, citing sources within the group. Currently, HP’s IT and services business is doing much better than its PC and printer business, and a split would allow both companies to better target their markets. In addition, the massive reorganization HP is currently undergoing would not yet have the desired effect on results.
In 2011, HP also headed for a split led by former CEO Leo Apotheker, who acquired the British software company Autonomy for it and services for almost 8 billion euros. That amount turned out to be far too high and Apotheker had to make way for current CEO Meg Whitman, who did express confidence in the PC branch and pointed out the high costs of a split and the benefits of scale when negotiating with parts manufacturers such as Intel.
Before the plan to break up, HP would have tried to sell parts. For example, the group would have tried to sell its PC branch from Dell and Lenovo, but both competitors would not see a takeover of the branch with a turnover of 25 billion euros in 2013. The Enterprise Services branch would have wanted to put HP away from the Indian companies Wipro and Infosys, but those efforts also failed and finally IBM was approached in vain for the Business Critical Server part.
It was recently announced that HP would be discussing a merger with EMC. The PC branch would have been seen as a stumbling block. A split could revive those negotiations.
Update, 13:17: HP has confirmed the acquisition.