HP Enterprise strikes $8.8 billion deal with Micro Focus for software assets
By Paul Sandle and Liana B. Baker
LONDON/NEW YORK (Reuters) - Hewlett-Packard Enterprise agreed to sell its software business to Micro Focus in a $8.8 billion deal that shrinks the Silicon Valley pioneer again while catapulting the little-known British firm into the top tier of European tech companies.
Autonomy, the British firm bought by HP in an ill-fated $11 billion push into software just five years ago, will return to British control after the deal for far below its original price.
HPE Chief Executive Meg Whitman is focusing the group on a few areas such as networking, storage and technology services since it separated last year from computer and printer maker HP Inc.
"Micro Focus' approach to managing both growing and mature software assets will ensure higher levels of investment in growth areas, like big data analytics and security, while maintaining a stable platform for ... software products that customers rely on," she said.
Micro Focus approached HPE in February, four months before Britain voted to leave the European Union in a shock referendum that initially spooked global financial markets, the British firm's executive chairman, Kevin Loosemore, said.
It is the second big deal involving a British company since the June 23 Brexit vote that many feared would put the brakes on mergers. It is also a relatively rare example of a British company buying U.S. technology assets.
Loosemore spotted another opportunity to profit from managing old software. Companies including banks and airlines pay Micro Focus to extend the life of the computers they use to run their businesses, for example to manage data. This allows the companies to avoid spending on newer computer systems.
"(It) is entirely consistent with our established acquisition strategy and our focus on efficient management of mature infrastructure products," he told reporters on a conference call from New York. Continued...