HP completes EDS purchase

Deal will help vendor compete with IBM for IT services market

HP wants to bulk up its IT services revenues

HP has closed the $13.9bn (£7.5bn) purchase of EDS in a deal it hopes will renew its challenge to IBM's dominance of the IT services market.

The acquisition is, by value, the largest in the IT services sector and the second largest in the technology industry.

"This is an historic day for HP and EDS and for the clients we serve," said Mark Hurd, HP chairman and chief executive.

"Independently, each company is a respected industry leader. Together, we are a global leader, with the capability to serve our clients – whatever their size, location or sector – with one of the most comprehensive and competitive portfolios in the industry."

HP has 1,000 staff ready to ensure the two company are integrated quickly and efficiently, after a slow integration following a $19bn takeover of Compaq in 2002 hampered profits.

EDS is the world's second biggest provider of IT services and saw revenues of $22.1bn last year.

IT services accounted for $16.6bn of HP's $104bn revenue last year compared with IBM's $54bn revenues in the area.