US computer maker Hewlett-Packard on Tuesday announced a 4.5 billion-dollar cash deal to buy Mercury Interactive a maker of business software.
"This is a market-changing event," Mercury chief executive Tony Zingale said in a telephone conference. "We instantly become one of the largest software venders in the world."
"The technologies fit together like a glove, and the portfolio is unmatched in the marketplace."
Provided the acquisition clears regulatory hurdles as expected, the purchase should be completed by the end of the year, said Hewlett-Packard vice president Thomas Hogan.
Hewlett-Packard planned no changes at Mercury until early next year to avoid disruption during the critical fourth quarter and year-end shopping season, according to Hogan.
"We will use the time to figure out what changes to make post-January 1," Hogan said. "This is a game-changing top-value acquisition."
Buying Mercury was expected to double Hewlett-Packard's work force to 6,000 people and increase its software business revenues to more than two billion dollars annually, according to the companies.
"Together, HP and Mercury instantly become the industry's premier provider of business technology optimization software," Zingale said.
"A deal of this magnitude creates significant opportunities for our customers, our shareholders, our people and our partners."
Palo Alto, California-based Hewlett-Packard (HP) will pay 52 dollars per share for Mercury, which is located in Mountain View, California.
"HP's software strategy is to be the clear leader in end-to-end enterprise IT management and help our customers tightly align IT priorities with changing business requirements," Hogan said.
HP predicted that the acquisition would increase revenues by 10 to 15 percent and its operating margin by an estimated 20 percent in fiscal year 2008.
