Hewlett-Packard CEO Meg Whitman told CRN Monday the company's split into two businesses paves the way for the new enterprise business to flex its acquisition muscle.
"Hewlett-Packard Enterprise will be better able and more quickly able to make acquisitions that further the new style of IT," said Whitman.
The split will create two public, Fortune 50 companies each with some $56 billion in sales. Hewlett-Packard Enterprise is set to include enterprise systems, software and services, while HP Inc. -- which will retain the current branding -- will include the company's personal systems and printing business.
The split is expected to be completed by the end of HP's fiscal year 2015 ending Oct. 31, 2015 and will give HP shareholders stock in both HP Inc. and Hewlett Packard Enterprise
Whitman's comments came after HP informed Wall Street analysts Monday that the company is still dealing with material, non-public information that could indicate a potential acquisition is being discussed.
Whitman said the "financial architecture" of both Hewlett-Packard Enterprise and HP Inc. has been established so both entities are better suited to compete in their respective markets.
Hewlett-Packard Enterprise will have "a balance sheet that will be tilted toward more inorganic moves, more M&A," Whitman said, noting debt from that side of the business will come from HP's Financial Services unit which will be a formidable competitive weapon to win enterprise business.
"On the HP Inc. side, it will have a very strong balance sheet that will fund some M&A, but also a lot of inorganic innovation," she said.
As HP looks at M&A in the enterprise business, Whitman told Wall Street analysts that such a deal faces stringent shareholder returns criteria.
"I just can't underscore enough the notion of this returns-based shareholder value creation strategy that we have for M&A," Whitman said.
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