According to an Oct. 5 Wall Street Journal (WSJ) report, Hewlett-Packard Co. (HP), has plans to announce on Oct. 6 plans to split into two companies, separating its computer and printer businesses from its corporate hardware and services operations. The division would be made through a tax-free distribution of shares to stockholders next year, according to the report.
A company spokesperson declined to comment on the report.
HP and some of its investors have long considered such a move, the newspaper noted. As one of the older big computer companies, for several years HP directors have discussed ways to restructure to keep up with technology upstarts.
Many investors and analysts have called for a break-up of the company, or a sale of the personal computer business, so that HP could focus on the more profitable operations of providing computer servers, networking and data storage to businesses. Company executives have said in the past that personal computers underpin and support the company as a whole.
According to the WSJ report, company split-ups in which shares of new divisions were spun off to stockholders in the past have resulted in higher stock market returns for investors. The PC business has shown signs of life in recent quarters, growing broadly geographically as businesses replace aging machines.
The Business Insider reported Oct. 5 that the PC and computer segment is massive for HP. For the first six months this year, it reported $27.8 billion in revenue. That’s about three times the size of HP’s next biggest unit, the Enterprise Group, which makes servers, storage, and network hardware.
The company reorganized itself in 2012 under Chief Executive Officer (CEO) Meg Whitman. That move combined its computer and printer businesses. Under the new split, Whitman would be chairman of the computer and printer business, and CEO of a separate enterprise company, according to one of the sources. Patricia Russo, who sits on HP’s board, would be chairman of the enterprise company. The printer and PC operation would be led by Dion Weisler, a current executive in that division.
