Hewlett Packard Enterprise Co. (NYSE: HPE) is merging some of its software assets with United Kingdom’s Micro Focus International Plc. The mentioned merger deal amounted to approximately $8.8 billion as the CEO of Hewlett Packard Enterprise Meg Whitman takes further action to cut down the company’s operations.
The US multinational company stated recently that it will contribute its software businesses in various areas, including big data analytics, application delivery management, as well as enterprise security to Micro Focus. On the other hand, Hewlett Packard Enterprise will obtain $2.5 billion in cash and its stockholders will own 50.1 percent of the merged organization. The shares of Micro Focus rallied by as much as 23% after the announcement.
Chief Executive Officer Whitman is seeking to to make Hewlett Packard Enterprise nimbler in order to attract more corporate clients with additional options from providers of cloud computing services, such as Microsoft and Amazon.com. This action comes after the announcement during the month of May that HPE would combine its technology-services segment with Computer Sciences Corp. The mentioned deal amounted to around $8.5 billion.
According to the Hewlett Packard Enterprise CEO, “They are fantastic assets.”
“They’re just not core to our strategy,” Whitman further added.
This most recent deal is the largest announced acquisition of an overseas target by a company in the United Kingdom, since Britain decided to exit the European Union.
Micro Focus International Plc is a company headquartered in Newbury, England. It can be considered as one of the largest tech corporations in Britain and coincidentally is replacing ARM Holdings Plc in the FTSE 100. ARM Holdings is a semiconductor design company whose sale to Softbank of Japan was completed in the current week.
Some of the assets will be going back to their home country. The UK tech company will be picking up pieces of Autonomy Corp, which is a troubled acquisition of Hewlett Packard. The acquisition deal was announced in the year 2011 under Leo Apotheker—Meg Whitman’s predecessor.
In the subsequent year, the firm revealed that it would take a charge worth $8.8 billion, citing falsifications. Thereafter, it would be faced with legal troubles with regards to the deal.
According to reliable sources, Hewlett Packard Enterprise had been considering to sell some of the software assets since the month of July.
As of the time of writing, the stock of Hewlett Packard Enterprise is changing hands at $22.09, up by 1.05 percent or 0.23 points.