Hewlett-Packard (HP) announced on Monday that it will split its company into two. The two companies will be publicly traded. The business oriented company, the company which handles business technology such as computer servers and data storage equipment, software and services, will be called Hewlett-Packard Enterprise while the PC company, the other half company which handles the selling of personal computers and printers, will be called HP Inc. HP Inc will retain the current company’s logo.
In splitting into two companies, Ms.Whitman, HP’s Chief executive is hoping that it would give each company with independence, focus, financial resources and flexibility they need to adapt quickly to the market and customer dynamics and make HP more competitive.
Ms. Whitman will be the chief executive of Hewlett-Packard Enterprise and will serve as nonexecutive chairman of HP Inc. Patricia F.Russo will be the chairwoman of Hewlett-Packard Enterprise whereas Dion Weisler will be president and chief executive of HP Inc.
This announcement raised up HP’s stock 4.74% to $36.87 on Monday. HP shares have been rising sharply this year, but still below their highs in recent years. This is not the first time that HP has split itself into two companies. In 1999, the test and measurement equipment division has separated from HP and become Agilent. Agilent rose 41% on their first day and the company became independent business company in 2000. As a result the company declined since then but as of now, Agile has market capitalization about the same as the first day’s value.
The transaction is expected to be completed by the end of fiscal year 2015.