HP squares up to Dell over £1bn data biz acquisition

More signs of action in the M&A market, as HP outbids its rival for data group 3Par.

Last Updated: 31 Aug 2010

Another day, another takeover battle – this time from the geek’s front line: HP (that’s the company formally known as Hewlett-Packard, not the sauce) has gazumped arch-rival Dell with a last-minute $1.6bn (£1bn) bid for data storage company 3Par.

3par had agreed a $1.15bn deal with Dell just last week, but HP says it’s been looking into acquiring it for a while and seems determined to get its way. It’s not particularly great news for Dell, which may end up losing out - but it does show a wider upward trend in the mergers and acquisitions market, which seems to be enjoying a purple patch at the moment.

Dell still has the right under the original offer to make a counter offer, which many expect it to do within the next few days. But since HP has a whopping $15bn war chest and is three times as profitable as Dell, if it comes to who’s got the deepest pockets HP is likely to emerge the victor.

Winning the deal would also help HP move on from the abrupt and controversial departure of former CEO Mark Hurd earlier this month.

The deal is the latest episode in a wider strategic shift in which both companies have moved away from their traditional hardware offerings and into new markets. HP has diversified into everything from smartphones to data storage and networking - and Dell has never been far behind.

The acquisition of 3Par, though, would mean the ability to offer business customers online data back up and storage - an indisputable advantage, particularly at a time when ‘the cloud’ (a jazzy way of saying ‘online data storage’) is the buzzword at the tip of the entire industry’s tongue.

Coming as it does only a week after Intel’s $8bn offer for anti-virus software provider McAfee, as well as big bids in the banking and commodities markets, this is another welcome sign that the M&A market is once again on the up.

Certainly compared to the shaky IPO sector, it’s in rude good health. According to figures from Dealogic, global dealmaking has risen by an impressive 60% this year. Maybe the recovery is on the way, after all?

In today's bulletin

Ad market bouncing back, says WPP's Sorrell
HP squares up to Dell over £1bn data biz acquisition
Persimmon beats Bovis to divvy, but mortgage woes continue
Campbell's souper bid for UB takes the biscuit
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