market is volatite,rangebound and moving sidesways due to some political instability of UPA govt and current iip data also injected inflationfigure making street confused.
It would be HP's biggest deal in six years.
HP is the world's largest maker of personal computers, while Texas-based EDS provides technology services to the governments and companies around the world.
The sale is expected to close in the second half of this year and more than double HP's revenue from services, which was $16.6 billion in 2007. EDS had $22.13 billion in revenue last year.
Their combined services business would have 210,000 employees -- although some analysts expect HP would trim jobs -- and operations in more than 80 countries.
HP said the business would be based at EDS' headquarters in Plano, Texas, and led by EDS chairman and Chief Executive Ronald A. Rittenmeyer.
HP said it expects the deal would produce "significant" cost savings and add to earnings by next year.
Palo Alto-based HP and EDS had said Monday that they were in "advanced discussions" about a possible combination without providing additional details.
In Tuesday's announcement, the companies said the deal would have an enterprise value of $13.9 billion without defining what that included. But based on 502.6 million EDS shares outstanding as of April 25, the acquisition would be worth $12.57 billion.
HP ended January with nearly $10 billion in cash and has a market value of about $115 billion.
If the deal is completed, it would be HP's biggest acquisition since it bought Compaq Computer Corp. for $19 billion in 2002. That acquisition paved the way for HP to supplant Dell Inc. as the world's largest PC maker.
Buying EDS would give HP more tools to challenge IBM Corp. in the lucrative technology services field. HP already has replaced IBM as the world's largest technology company, based on revenue.
The demand for data management and technology consulting services has steadily grown during the past two decades as the automation of corporate America and the rise of the Internet prompted more businesses to hire contractors to help run their computer software and hardware.
IBM's technology services division brought in $54 billion in revenue last year, accounting for half of the company's total sales. Combined, EDS and HP's technology services division had about $39 billion in revenue last year.
In one of its biggest previous attempts to expand its technology services, HP attempted to buy PricewaterhouseCoopers' consulting division in 2000. IBM wound up buying the unit instead.
HP has been on a roll since it hired Mark Hurd as chief executive three years ago. Propelled by earnings growth that has consistently exceeded analyst expectations, the company's stock price has more than doubled since Hurd's arrival.
Acquiring EDS could yield more government work for HP, which had about $500 million in prime federal contracts in fiscal 2007. EDS is far better connected, with deals worth about $2.5 billion -- putting it among the top 10 among government technology contractors.
Combined, HP and EDS still would lag significantly behind government contractors like Lockheed Martin Corp. and Boeing Co.
As in many corporate marriages, cultural clashes between HP and EDS could ruin the union, said AMR Research analyst Dana Stiffler. "Palo Alto versus Plano wrangling will destroy any short-medium term benefit unless there's a strong integration roadmap," she predicted.
HP earned $7.3 billion on $104 billion in revenue last year while EDS made $716 million on $22.1 billion in revenue.
EDS has been linked with possible deals previously, including a reported interest by Deutsche Telekom late last year and Dell before that. No suitors ever confirmed reports that they were talking.
Former IBM salesman H. Ross Perot started EDS in 1962 to help run other companies' computer systems -- a specialty generally known as information-technology or IT services.
Perot sold EDS to General Motors Corp. for $2.5 billion in 1984 and eventually became so disillusioned with how that deal worked out that he sold his remaining EDS shares to the automaker so he could start a new rival service bearing his name.
An outspoken billionaire, Perot became even more famous for running for U.S. president in 1992 and 1996. GM spun off EDS as an independent company in 1996 and remained its largest customer.
EDS was riding high at the start of the decade, despite the dot-com bubble's bursting. But in late 2002, earnings shortfalls led to investor lawsuits, a Securities and Exchange Commission investigation, the ouster of the chief executive, and a sharp drop in the stock price.
The company lost $1.7 billion in 2003 but gradually righted itself under CEO Michael Jordan, a retired CBS and Westinghouse CEO. He fixed some money-losing contracts, including a multibillion-dollar deal to build a communications network for the Navy and Marine Corps, and began cutting costs by sending thousands of jobs to low-cost countries such as India.
Although he hasn't seen any signs to suggest EDS has been looking for a buyer, Jefferies & Co. analyst Joseph Vafi said the company's board might have decided a sale would create a quicker payoff for shareholders than continuing to try to grow the company in the highly competitive technology services industry.
Under Hurd's leadership, HP bought business software maker Mercury Interactive Corp. for $4.9 billion in 2006 and last year paid $1.7 billion for data management service Opsware Inc., which had sold a large chunk of its operations to EDS in 2002.
AP Business Writers Jennifer Malloy in New York, David Koenig in Dallas and Dibya Sarkar in Washington, D.C., contributed to this report.
Tuesday, May 13, 2008
High rates, rupee hurt India manufacturing - minister
A strong rupee and high interest rates are responsible for a slowdown in India's manufacturing growth, which the government hopes to reverse with new industry initiatives, the minister of state for industries said.
Industrial output grew at its weakest annual pace in six years in March, data showed on Monday, knocking the rupee to a one-year low and fanning speculation the Reserve Bank of India (RBI) may hold off tightening policy further in its fight against soaring inflation.
"The hardening of the rupee has adversely impacted our exports, which account for a major chunk of manufacturing," Ashwani Kumar told Reuters in an interview.
"The high interest rate burden which has hit the consumer durables industry is responsible for a decline in manufacturing."
He said a new thrust by the government to boost investment and technology in leather, textiles, food processing and electronic hardware would help reverse the slowing trend in manufacturing.
"As soon as interest rates soften and there is a general pick-up in the economy, we will be able to reverse the trend."
He expected the economy to maintain a robust rate of growth despite sluggishness in other parts of the world.
"Despite a general slowdown that one is witnessing in the global economy, particularly in the lead economy of the United States, India will be able to maintain an annual GDP growth rate of 8 percent-plus," Kumar said.
"I have full reason to believe that the India growth story is a continuing one."
He expected wholesale price inflation, which hit a 3-½ year high of 7.6 percent in late April, to moderate sooner than expected.
"It will take about 8 to 12 weeks for the impact of the preliminary measures of the government to be felt on prices," Kumar said.
An "unprecedented and extraordinary" rise in global food and energy prices would have an adverse impact, but the government was looking to insulate the economy from such shocks.
"We are not allowing a hike in global prices so far to hit the common man, and the oil companies and the government are absorbing the loss," Kumar said.
"But this is a serious situation and we are concerned."
Industrial output grew at its weakest annual pace in six years in March, data showed on Monday, knocking the rupee to a one-year low and fanning speculation the Reserve Bank of India (RBI) may hold off tightening policy further in its fight against soaring inflation.
"The hardening of the rupee has adversely impacted our exports, which account for a major chunk of manufacturing," Ashwani Kumar told Reuters in an interview.
"The high interest rate burden which has hit the consumer durables industry is responsible for a decline in manufacturing."
He said a new thrust by the government to boost investment and technology in leather, textiles, food processing and electronic hardware would help reverse the slowing trend in manufacturing.
"As soon as interest rates soften and there is a general pick-up in the economy, we will be able to reverse the trend."
He expected the economy to maintain a robust rate of growth despite sluggishness in other parts of the world.
"Despite a general slowdown that one is witnessing in the global economy, particularly in the lead economy of the United States, India will be able to maintain an annual GDP growth rate of 8 percent-plus," Kumar said.
"I have full reason to believe that the India growth story is a continuing one."
He expected wholesale price inflation, which hit a 3-½ year high of 7.6 percent in late April, to moderate sooner than expected.
"It will take about 8 to 12 weeks for the impact of the preliminary measures of the government to be felt on prices," Kumar said.
An "unprecedented and extraordinary" rise in global food and energy prices would have an adverse impact, but the government was looking to insulate the economy from such shocks.
"We are not allowing a hike in global prices so far to hit the common man, and the oil companies and the government are absorbing the loss," Kumar said.
"But this is a serious situation and we are concerned."
Steel cos to invest Rs 89240 crore: Survey
Indian steel firms plan to invest Rs 89240 crore in coming months to expand capacity by 31 million tonnes to meet rising demand in a fast growing economy, a survey said on Monday. The survey by Associated Chambers of Commerce and Industry said price pressures could ease if two-third of the planned capacity expansion was carried out in the coming months. Companies like Tata Steel, Bhushan Steel and Vedanta Resources announced major expansion plans in recent months in eastern states, it said. "With steel prices increasing by more than 30 per cent in 2008, the industry announced capacity expansion plans of 31 million tonnes in the last quarter of 2007-08 in order to meet the fast growing demand." The government has persuaded steel firms not to raise prices for three months and imposed an export tax to increase local supplies and fight inflation that hit a 3-½ year high in late April. While steel production grew by 5.2 per cent to 55.26 million tonnes in 2007-08, consumption grew by 11.72 per cent to 51.80 million tonnes. More-than-expected growth in demand and rising raw material prices have been pushing steel prices up, ASSOCHAM said.
‘IT exports to touch $80 b in three years’
IT exports from India are poised to reach $80 billion within three years effectively doubling from $40 billion achieved in 2007-08. In the process it would create about two million more direct jobs, according to Mr Jainder Singh, Union Secretary, Information Technology and Communication.
The sector also provides two million jobs to IT professionals directly and another 7-8 million people indirectly and contributes about 5 per cent of the country’s gross domestic product, and 33 per cent of exports. The sector contribution to GDP is set to go up significantly, he said.
While the Indian IT brand is well established, it is faced with the challenge of increasing the employable pool of engineers to sustain the growth, Mr Singh said launching ‘Prepare Future’, a Faculty Updation Programme here.
Mr Singh said of the 4 lakh who graduate out of engineering colleges in the country, about 25 per cent are actually employable. Thrust on Training
Therefore, the accent is on increasing the employable pool. However, this time, instead of focus on the student and his training, the thrust is on training teachers.
The importance of training can be gauged from the fact that about Rs 4,000 crore would be spent by IT companies on training their employees during the year, he said.
The IT department has chosen the Centre for Development of Advanced Computing (C-Dac), Hyderabad as the nodal centre to design, develop and help train faculty of engineering colleges.
The focus has shifted on to training teachers as the engineering colleges are faced with shortage of trained teaching staff, who require to update skills and brace up with new technologies and curriculum.
The C-DAC will provide both instructor-led training and online modules from Media Lab Asia, IIT-Chennai and IIITs, Dr. Sharat Chandra Babu, Director of C-DAC, said.
The Managing Director of Nvidia India, Mr JA Chowdary, said unlike in the past it was not enough to have some specialisation to secure an IT job.
No one is in without matching the company requirements. This opens up opportunity for specialised training.
The sector also provides two million jobs to IT professionals directly and another 7-8 million people indirectly and contributes about 5 per cent of the country’s gross domestic product, and 33 per cent of exports. The sector contribution to GDP is set to go up significantly, he said.
While the Indian IT brand is well established, it is faced with the challenge of increasing the employable pool of engineers to sustain the growth, Mr Singh said launching ‘Prepare Future’, a Faculty Updation Programme here.
Mr Singh said of the 4 lakh who graduate out of engineering colleges in the country, about 25 per cent are actually employable. Thrust on Training
Therefore, the accent is on increasing the employable pool. However, this time, instead of focus on the student and his training, the thrust is on training teachers.
The importance of training can be gauged from the fact that about Rs 4,000 crore would be spent by IT companies on training their employees during the year, he said.
The IT department has chosen the Centre for Development of Advanced Computing (C-Dac), Hyderabad as the nodal centre to design, develop and help train faculty of engineering colleges.
The focus has shifted on to training teachers as the engineering colleges are faced with shortage of trained teaching staff, who require to update skills and brace up with new technologies and curriculum.
The C-DAC will provide both instructor-led training and online modules from Media Lab Asia, IIT-Chennai and IIITs, Dr. Sharat Chandra Babu, Director of C-DAC, said.
The Managing Director of Nvidia India, Mr JA Chowdary, said unlike in the past it was not enough to have some specialisation to secure an IT job.
No one is in without matching the company requirements. This opens up opportunity for specialised training.
State Bank of India, Australia's IAG in insurance JV
State Bank of India, the country's top lender, and Insurance Australia Group have signed a memorandum of understanding for a general insurance venture to tap the fast-growing Indian market, the firms said on Tuesday.
The firms will finalise an agreement and apply for regulatory approvals, they said in a joint statement, without specifying financial details.
SBI will hold 74 percent in the venture, with IAG holding the remaining 26 percent, the maximum allowed under Indian law.
"Establishing a general insurance joint venture is a key element of SBI's strategy to pursue emerging, high-growth opportunities," Deepak Chawla, SBI's deputy managing director for corporate strategy, said in a joint statement.
The venture hopes to start business in the current financial year and aims to be "amongst the top three players in general insurance in a period of about 10 years," the statement said.
State-run SBI, which has more than 10,000 branches and 100 million customers, has a venture with Cardiff, a unit of BNP Paribas, for life insurance.
"Forming a general insurance partnership in India ... is a significant step in IAG's Asian expansion strategy," IAG Chief Executive Michael Hawker said.
"We identified India four years ago as a market we wanted to enter as part of our stated strategy to diversify into fast-growing general insurance markets in Asia," he said.
IAG expects to fund the venture from internal accruals which "will not be at a material level in the context of the group," the statement said.
India's general insurance sector has grown at a compounded annual rate of 14 percent over the past five years, and is forecast to grow 15-20 percent per annum over the next 10 years, Hawker said.
India, which has 18 life and 18 non-life insurance firms, has one of the lowest penetration levels in Asia. Recent entrants into general insurance include a venture of India's Future Group and Italy's Generali, and a venture of India's Housing Development Finance Corp and Germany's Ergo.
The firms will finalise an agreement and apply for regulatory approvals, they said in a joint statement, without specifying financial details.
SBI will hold 74 percent in the venture, with IAG holding the remaining 26 percent, the maximum allowed under Indian law.
"Establishing a general insurance joint venture is a key element of SBI's strategy to pursue emerging, high-growth opportunities," Deepak Chawla, SBI's deputy managing director for corporate strategy, said in a joint statement.
The venture hopes to start business in the current financial year and aims to be "amongst the top three players in general insurance in a period of about 10 years," the statement said.
State-run SBI, which has more than 10,000 branches and 100 million customers, has a venture with Cardiff, a unit of BNP Paribas, for life insurance.
"Forming a general insurance partnership in India ... is a significant step in IAG's Asian expansion strategy," IAG Chief Executive Michael Hawker said.
"We identified India four years ago as a market we wanted to enter as part of our stated strategy to diversify into fast-growing general insurance markets in Asia," he said.
IAG expects to fund the venture from internal accruals which "will not be at a material level in the context of the group," the statement said.
India's general insurance sector has grown at a compounded annual rate of 14 percent over the past five years, and is forecast to grow 15-20 percent per annum over the next 10 years, Hawker said.
India, which has 18 life and 18 non-life insurance firms, has one of the lowest penetration levels in Asia. Recent entrants into general insurance include a venture of India's Future Group and Italy's Generali, and a venture of India's Housing Development Finance Corp and Germany's Ergo.
MARKET PREDICTION
GLOBAL MARKETS ARE IN POSITIVE MODE DUE TO EASING OF OIL PRICE..
YESTERDAY MARKET SLIPPED DUE TO POOR IIP DATA..
LEVEL OF NIFTY 5000-5030-5100-5150 GO LONG FROM 5030 WITL SL OF 5000
IN IT AND TEXTILE.
GO SHORT IF NIFTY DOES NOT HOLD 5100 LEVEL WITH SL OF 5130 IN CONSTRUCTION AND BANKING SECTOR.
TOTAL MARKET OI IS 71 K CR AND PUT CALL RATIO SHOOT UP TO 1.46.
HAVE A NICE TRADING DAY
-MR SAM
YESTERDAY MARKET SLIPPED DUE TO POOR IIP DATA..
LEVEL OF NIFTY 5000-5030-5100-5150 GO LONG FROM 5030 WITL SL OF 5000
IN IT AND TEXTILE.
GO SHORT IF NIFTY DOES NOT HOLD 5100 LEVEL WITH SL OF 5130 IN CONSTRUCTION AND BANKING SECTOR.
TOTAL MARKET OI IS 71 K CR AND PUT CALL RATIO SHOOT UP TO 1.46.
HAVE A NICE TRADING DAY
-MR SAM
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