Sunday, October 30, 2011

No Spin-off For The HP Computer Business

HP has confirmed the company's plans to keep the PC decision as a part of the larger whole and not sale or spin it off.

Late last week HP announced that it had completed an enteral evaluation of its Personal Systems Group (PSG) and has decided the unit will no longer purse the option of selling or spinning off the division to its own company. Instead opting to keep the No. 1 manufacturer of personal computers in the world as part of the main company.

“HP objectively evaluated the strategic, financial and operational impact of spinning off PSG. It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees,” said Meg Whitman, HP president and chief executive officer. “HP is committed to PSG, and together we are stronger.”

Former CEO Leo Apotheker had announced plans to either sell or spin-off the division back in August. A move that left the company in serious turmoil and raised some serious questions. The market did not react well to the announcements and Apotheker was removed from his post by the board on Sept. 22.

HP has said thousands of hours were spent understanding how extracting the PC business would impact everything from supply chain to product development and brand image. The strategic review involved subject matter experts from across the businesses and functions. The data-driven evaluation revealed the depth of the integration that has occurred across key operations such as supply chain, IT and procurement. It also detailed the significant extent to which PSG contributes to HP’s solutions portfolio and overall brand value. Finally, it also showed that the cost to recreate these in a standalone company outweighed any benefits of separation.

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