HP split seen as 'a positive move'

HP split seen as ‘a positive move’
Richard Wilson Hewlett-Packard has surprised the industry with plans to split its $47bn business into two separate companies. Group CEO Lewis Platt last week announced plans to spin-off HP’s $7.6bn test and measurement business under a new name. The move, which seems to have caught HP’s international sales organisations somewhat by surprise, has been welcomed by the UK measurement business. “It is a positive move,” said a spokesman for HP’s UK test and measurement business. Europe will be an increasingly important market for the separated measurement business. The split is a recognition by Platt that HP has become too large and difficult to manage as one group, with businesses ranging from PCs and printers to components and test equipment. “We are taking this action to sharpen the strategic focus of our businesses,” said Platt, who warned only last month: “We’re not meeting our growth objectives.” HP is disappointed with growth in its core computer division, believed to be around two per cent. Revenues in the measurement business, which includes the optoelectronic device and medical systems activities, declined 11 per cent in the first quarter of 1999. Platt will step down once the split is made. Ed Barnholt will head up the separated measurement company, which may have 15 per cent of its share value floated on the stock market later this year.

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