HP Buys Palm: A New Smartphone Superpower?

Well so much for Palm surviving as an independent company; HP has swooped in a snapped up the smartphone company for a cool $1.2 billion.

HP today announced that it has acquired Palm at a price of $5.70 per share of Palm common stock in cash or an enterprise value of approximately $1.2 billion. The transaction has been approved by both HP's and Palm's boards of directors and is expected to close during HP's third fiscal quarter which ends July 31.

"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," said Todd Bradley, executive vice president, Personal Systems Group, HP. "And, Palm possesses significant IP assets and has a highly skilled team. The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market."

So HP is stoked but what about Palm? It would seem the people at Palm are just as excited at the thought of a merger with HP, despite what CEO Jon Rubinstein said last week. In an interview with the Financial Times, Rubinstein said that while the board would definitely consider any serious offers to purchase the company, he was confident the company could prosper as an independent company. Rubinstein even said he had a plan to get Palm out of the red and into the black. "Palm can survive as an independent company," he said at the time. "We have a plan that gets us to profitability." In a statement today, Rubinstein said his company was "thrilled" about the deal with HP.

"We're thrilled by HP's vote of confidence in Palm's technological leadership, which delivered Palm webOS and iconic products such as the Palm Pre. HP's longstanding culture of innovation, scale and global operating resources make it the perfect partner to rapidly accelerate the growth of webOS," said Rubinstein. "We look forward to working with HP to continue to deliver industry-leading mobile experiences to our customers and business partners."