HP agrees to pay about $12.6B for Electronic Data Systems in deal to challenge IBM

Hewlett-Packard says it will buy Electronic Data Systems for about $12.57 billion (euro8.15 billion) in cash in a move to more than double its services revenue and become a bigger challenger to IBM.

The purchase price of $25 (euro16.20) a share represents a 4 percent premium to Plano, Texas-based EDS' closing share price Monday.

Palo Alto, California-based Hewlett-Packard says the deal has been unanimously approved by both companies' boards.

It is expected to close in the second half of this year.