HP decides to keep PC business

Hewlett-Packard Corp. won’t sell off its personal computer unit after all.

The company announced that it has completed its evaluation of strategic alternatives for its Personal Systems Group and has decided the unit will remain part of the 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 CEO.

"HP is committed to PSG, and together we are stronger," she said in an announcement following an Oct. 27 investors conference.

The strategic review, which involved experts from across HP businesses and functions, reaffirmed HP's model and the value for its customers and shareholders, the announcement said.

“PSG is a key component of HP's strategy to deliver higher value, lasting relationships with consumers, small- and medium-sized businesses and enterprise customers. The HP board of directors is confident that PSG can drive profitable growth as part of the larger entity and accelerate solutions from other parts of HP's business,” the HP statement explained.

“The data-driven evaluation revealed the depth of the integration that has occurred across key operations such as supply chain, IT and procurement,” it said.

“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,” it added.

The news sent HP shares up nearly 4 percent to $28 by midday Friday, making the sock the top gainer on the Dow Jones Industrial Average.

Hewlett-Packard Co., of Palo Alto, Calif., ranks No. 7 on Washington Technology’s 2011 Top 100 list of the largest federal government contractors.

About the Author

David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.

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