Why Oracle Should Acquire HP
Silicon Valley’s MaverickOracle CEO Larry Ellison is "unpredictable and buying HP and creating the largest tech company in the world would be a crowning jewel for the ‘maverick’ in Silicon Valley."
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Familiar FacesFormer HP CEO and current Oracle co-president Mark Hurd understands HP’s business, staff and culture better than anyone, and would do a great job of running the company.
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The Promise of the Integrated StackOracle wants to offer fully integrated solutions — a complete stack. An HP acquisition would help. Bernstein would expect Oracle to still spin off the HP business.
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Follow the MoneySuch a deal would offer lots of opportunity for value creation, including cost synergies, improved operating performance, and portfolio divestments and spin outs, according to Bernstein.
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Location, Location and LocationThe two companies’ headquarters are less than 15 miles apart, which would help with integration.
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Follow the Money, Part IIThe deal would be financially attractive for Oracle, according to Bernstein, which is assuming a 50 percent premium and 25 percent/75 percent cash/stock financing structure.
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Follow the Money, Part IIISuch a deal would be significantly accretive to Oracle’s earnings — more than 50 cents a share at minimum.