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HP-EDS deal moves closer to approval; outcome still unclear for the channel

Hewlett-Packard’s (HP) $13.9 billion bid to buy Electronic Data Systems (EDS) made it through U.S. antitrust review, the companies reported Monday. The deal still hinges on approval by European regulators and a vote by EDS shareholders, who will meet July 31.

It remains unclear how the deal will affect channel partners from both companies. HP CEO Mark Hurd has said that there will be no bumps in the road for channel partners since EDS and HP play mostly in different fields. Still, concerns run high among partners and will until the future unfolds after final approval. It is also unclear what will happen to the long-term relationships EDS holds with HP competitors like Cisco Systems, Dell and IBM.

In the meantime, it may not be as easy as some expected for the deal to pass through EDS shareholders. So far, two suits have been filed against EDS — one by an organization and another by an individual shareholder — claiming that the HP deal prohibits EDS from seeking more money from higher bidders. One suit was filed by Utah-based Intermountain Ironworkers Fund, and the other suit was filed in Delaware by shareholder Joseph Villari, who wants the court to force EDS to auction itself off at a higher price.

If approved, the acquisition will double HP’s business services arm and revenues, placing it second to IBM. Last year, HP’s services arm earned $16.6 billion.

Click here for a complete story about HP’s bid for EDS.

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Really, HP only made $16M in services last year? That should probably be billion.
Thanks, Leon. Good catch!