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HP To Integrate EDS In Technology Solutions Group; EDS CEO Ron Rittenmeyer To Retire - Update

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Computer and printer manufacturer Hewlett-Packard Co. (HPQ), announced Friday that it was in the process of integrating EDS into its Technology Solutions Group, and EDS President and Chief Executive Officer, Ron Rittenmeyer, will retire effective December 31.

Rittenmeyer joined EDS in 2005 and was named chairman and CEO in 2007. He played a key role in accelerating the company's transformation and subsequent integration within HP.

Meanwhile, the world's largest PC maker, said EDS would become a business unit within HP's Technology Solutions Group or TSG. The company expects the organizational change to allow HP to continue to quickly realize its revenue growth and cost-efficiency goals for EDS.

In May, HP agreed to acquire EDS for about $13.9 billion on an enterprise value basis, in a move that is expected to strengthen HP's services business and give HP more tools to challenge IBM Corp. (IBM) in the lucrative technology services market. HP, however, has already superseded IBM as the world's largest technology company, based on revenue.

Acquiring EDS advances HP's stated objective of strengthening its services business. The steady demand for data management and technology consulting services during the past two decades also gives the desired rationale to the deal. The computerization and the rise of the Internet have provoked more businesses to hire contractors to help run their computer software and hardware.

HP today noted that revenue from the newly combined TSG business group accounted for roughly $14.6 billion or 43% of the company's total revenue in the fourth quarter of fiscal year 2008 and more than half the company's operating profit.

Joe Eazor will assume the role of senior vice president of EDS with responsibility for the business unit's operations, reporting directly to Ann Livermore, Executive Vice President, TSG.

Eazor currently serves as senior vice president of Transformation, having led the EDS deal team through its acquisition by HP and the subsequent integration.

Prior to the acquisition, Eazor was executive vice president of Corporate Strategy and Business Development at EDS. He also served as senior vice president of EDS Asia Pacific.

HPQ closed Friday's regular trading session at $33.53, up 14 cents on a volume of 21.4 million shares.

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