HP to split into 2 listed firms:PC, printers & infra, software

Tech giant Hewlett-Packard today said it will split into two listed companies, separating its personal computers and printing business from the enterprise technology infrastructure, software and services businesses.

HP said in a statement that it plans to separate into two new publicly traded Fortune 50 companies.

"One comprising HP's market-leading enterprise technology infrastructure, software and services businesses, which will do business as Hewlett-Packard Enterprise, and one that will comprise HP's market-leading personal systems and printing businesses, which will do business as HP Inc. and retain the current logo," it added.

Immediately following the transaction, which is expected to be completed by the end of fiscal 2015, HP shareholders will own shares of both Hewlett-Packard Enterprise and HP Inc. The transaction is intended to be tax-free to HP's shareholders for federal income tax purposes.

Today's announcement comes as HP approaches the fourth year of its 5-year turnaround plan.

"The decision to separate into two market-leading companies underscores our commitment to the turnaround plan. It will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders," HP President and Chief Executive Officer Meg Whitman said.

HP said the separation into independent publicly traded companies will provide each company with its own, more focused equity currency, and investors with the opportunity to invest in two companies with compelling and unique financial profiles well suited to their respective businesses.

Whitman, President and Chief Executive Officer of HP, and Cathie Lesjak, Chief Financial Officer of HP, will hold these positions with Hewlett-Packard Enterprise.

When the separation is complete, Whitman will also serve on the Board of Directors of Hewlett-Packard Enterprise, and Pat Russo will move from Lead Independent Director of HP to Chairman of Hewlett-Packard Enterprise.

Dion Weisler, Executive Vice President of HP's Printing and Personal Systems business, will lead HP Inc. as President and Chief Executive Officer. Whitman will serve as non- executive Chairman of HP Inc.'s Board of Directors.

For fiscal 2014, HP reaffirmed its non-GAAP diluted net EPS outlook range of USD 3.70 to USD 3.74, and updated its fiscal 2014 GAAP diluted net EPS outlook to be in the range of USD 2.60 to USD 2.64.