Article from SFGate.
“Hewlett-Packard Chief Executive Officer Meg Whitman announced Thursday that the company has decided not to spin or sell off its PC division, another repudiation of a controversial plan proposed in August by her ousted predecessor, Léo Apotheker.
Whitman said an internal review showed it would be more costly to sell or spin off the unit, called the Personal Services Group, than to keep it within the Palo Alto company.
“HP objectively evaluated the strategic, financial and operational impact of spinning off PSG,” Whitman said in a statement. “It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees. HP is committed to PSG, and together we are stronger.”
The plan to spin off or sell the division was one of the major factors that led HP’s board of directors to dump Apotheker in September and hire Whitman. The PC unit is HP’s least profitable, but accounts for about one-third of the company’s revenue.
In a news release issued minutes after the close of trading on Wall Street Thursday, HP noted the unit generated $40.7 billion in revenue for fiscal year 2010.
HP said the internal review “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 stand alone company outweighed any benefits of separation.”
When she took the helm, Whitman said her appointment wasn’t a signal that HP was shifting its strategy away from the course set by Apotheker.
But at an economic conference earlier this month in San Francisco, Whitman was asked whether HP would continue Apotheker’s software expansion strategy following the company’s $10.3 billion purchase of British software maker Autonomy Corp.
“It’s certainly the end of big acquisitions,” Whitman said.
Stock in HP closed at $26.99 per share, up $1.24, on the New York Stock Exchange.”
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