HP Buys Palm

April 28 2010 - Computer giant HP is buying cell phone manufacturer Palm in a deal valued at $1.2 billion. Palm had been up for sale for several weeks, but HP emerged as the buyer today after several other companies apparently declined to buy the struggling company.

Palm had launched a number of new handsets in the past year (such as the Pre) that used their own WebOS operating system,  but the company had struggled in the face of competition from Apples iPhone and phones running Google's Android OS. According to reports, the company decided to put itself up for sale earlier this year.

HP has not yet clarified what they expect to do with the company, but has said that Palm chief Jon Rubenstein will stay at the company. HP's executive VP of the Personal Systems Group claimed that "Palm's innovative operating system provides an ideal platform to expand HP's mobility strategy and create a unique HP experience spanning multiple mobile connected devices.. Palm possesses significant IP assets and has a highly skilled team. The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market." This would seem to indicate that HP may take the WebOS and launch their own devices, possibly reviving the venerable iPaq branding.

The deal values Palm at a total of $1.2 billion, or $5.70 a share, a premium of just over a dollar over the share prize at the time the deal was announced.The deal is expected to close on July 31st.