HP buying Palm for 1.2 billion dollars

Hewlett-Packard announced Wednesday it was buying mobile phone maker Palm for 1.2 billion dollars, giving the US computer giant a foothold in the fast-growing market for smartphones.

HP and Palm said Palm stockholders will receive 5.70 dollars in cash for each share of Palm common stock they hold at the closing of the merger.

The companies said the acquisition has been approved by the boards of directors of both firms.

"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," HP executive vice president Todd Bradley said.

"The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share," he said.

"Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market," Bradley said.

HP and Palm said the transaction is expected to close during the quarter of HP's fiscal year ending July 31, 2010.

They said Palm's current chairman and chief executive Jon Rubinstein is expected to remain with the company.

Palm has been the subject of acquisition rumors since it posted more disappointing results last month.

Palm came out with some of the first personal digital assistants in the 1990s, but in recent years has been lagging behind rivals Nokia, Apple and Research in Motion.

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