Another deal in the tech sector reached its fate. Hewlett-Packard Company (NYSE:HPQ) has broken down merger talks with Computer Sciences Corporation (NYSE:CSC), when last month the discussions were reaching to conclusion, according to media reports.
The $9.6 billion purchase of Computer Sciences marks the biggest deal of HP since 2011. HP is eyeing on big M&A to redefine the firm’s enterprise business, ahead of its planned split into two separate companies. Over the months Hewlett-Packard has exploring the potential Computer Sciences purchase, but currently doesn’t aim to resume takeover talks with the company.
Computer Sciences provides information technology (IT) and professional services and solutions to commercial businesses in addition to United States Federal Government agencies. Whitman said this week she sees the recent wave of mergers and acquisitions in the tech sector as a “tectonic plate” shift in the industry.
“We talk to a lot of people, a lot of the time, but I can’t comment on this one specifically,” she said Wednesday when asked about Computer Sciences.
Two weeks ago Computer Sciences announced plans to split onto two separate firms. One unit focuses on government business while other provides services to commercial clients.
HP has completed several deals over the last seven to eight months. The acquisitions are a part of company’s plan to explore ways to support businesses after the split. Recently the firm acquired Aruba Networks worth $2.5 billion, a networking company, and security startup Voltage Security Inc. in April as well as cloud startup Eucalyptus Systems Inc. late last year.
In spite of firm’s acquisitions and potential research and development programs, the firm is still facing the hurdle in its strength due to the cloud computing business which is eating up its server business and emergence of new software companies also hurt the firm. This was evident in the company’s last quarter earnings report, in which the firm suffered year-over-year decline in sales.
The company will be expected to acquire EMC Corp, a strong player in cloud computing, which has a market value of around $52.4 billion, according to Raymond James. If HP will procure EMC then it would take it in line strong cloud service providers.
