HP splits its consumer and enterprise businesses

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Hewlett-Packard (HP) is going to be split into two separate public companies – HP Inc., which will focus on the PCs and Printers business and Hewlett-Packard Enterprise, which will focus on corporate hardware, software and services business (including HP’s OpenStack Helion cloud platform). The company said that shareholders will be given a stake in both companies.

 

The reason for this split seems to be that the company wanted to separate its comparatively better-performing PCs and printers business from the corporate-focused operations.

Management structure: After the split, current HP CEO Meg Whitman will be heading Hewlett-Packard Enterprise and will serve as non-executive Chairman of HP Inc.’s Board of Directors. Dion Weisler, the current EVP of HP’s Printing and Personal Systems business, will lead HP Inc.

Hewlett-Packard Enterprise: This is expected to focus on opportunities in the cloud, big data, security and mobility sectors. HP Financial Services will be one of the most important components of Hewlett-Packard Enterprise’s operations. Also, HP said that HP Financial Services will continue to provide financing and business model innovation for customers and partners of HP Inc. Some of its other enterprise offerings include the Apollo, Gen 9 and Moonshot servers, the 3PAR storage platform, and the HP OneView management platform among others.

HP Inc.: HP Inc. is expected to extend investments in 3D printing and new computing experiences, besides its PC and printing business.

Transaction details: The company said that the separation transaction is intended to be tax-free to HP shareholders for federal income tax purposes. The transaction is expected to be completed by the end of the current fiscal year, though it’s still awaiting final approval from the HP Board of Directors. Goldman Sachs & Co. is serving as the financial advisor and Wachtell, Lipton, Rosen and Katz is serving as legal advisor to HP.

 

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HP splits its consumer and enterprise businesses