San Francisco: Hewlett-Packard Co, the world’s biggest personal-computer maker, agreed to buy Electronic Data Systems Corp for $13.9 billion to more than double its sales from computer services. The company raised its full-year profit and sales forecasts.

Hewlett-Packard will pay $25 a share, or 33% more than Electronic Data’s closing price on May 9, before the companies disclosed they were in talks. The acquisition will start adding to earnings, excluding some costs, as of fiscal 2009, Hewlett-Packard said on Tuesday in a statement.

The purchase is Hewlett-Packard’s largest since the $18.9 billion takeover of Compaq Computer Corp, led by chief executive officer Mark Hurd’s predecessor, Carly Fiorina.

The company said on Tuesday that secondquarter profit probably amounted to 87 cents a share, excluding some costs, beating the average 84-cent estimate of analysts surveyed by Bloomberg. Sales advanced to $28.3 billion, also topping projections. The company said sales will amount to at least $114.2 billion, compared with at least $113.5 billion.

The transaction should close in the second half of 2008, the companies said on Tuesday in a statement.

The acquisition will more than double Hewlett-Packard’s annual sales in its services unit to almost $40 billion, making it as large a business as PCs. Researcher IDC predicts that PC shipment growth probably will slow to 13% worldwide in 2008 from 15% last year, dragged down by waning demand in the US, the largest market for the machines. Hewlett-Packard gets about 15 % of its revenue from services.

The company competes against IBM in storage devices, software and servers — computers used to run corporate networks and websites.

IBM got about $54.1 billion from services last year, or more than half its sales. Sales growth at Electronic Data slowed to 4% last year, half the pace of the previous year.

Sixty-year-old Ronald Rittenmeyer, who became CEO in September, relied on overseas expansion to boost contract signings 66% to $5.6 billion last quarter. Still, a slowing US economy forced some clients to curb spending on small projects, especially in the manufacturing and consumer-products industries, he said last month.

Source : DNA