Hewlett Packard to Split into Two Public Companies

Hewlett Packard, the famous American tech giant, announced Monday that it would be splitting into two publicly traded companies that would segregate its software, technology and servers business from its PC and Printers business.

The Palo Alto-based IT firm said that shareholders would be given ownership in both companies through a tax-free transaction by next year. The "enterprise technology infrastructure, software and services businesses" will operate under the name of Hewlett-Packard Enterprise while the PC and printers manufacturing company will operate under HP Inc.

Meg Whitman, the CEO of HP explained in a statement that the move to split comes in an effort to focus better on core businesses.

"The decision to separate into two market-leading companies underscores our commitment to the turnaround plan. It will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders," Whitman said.

"In short, by transitioning now from one HP to two new companies, created out of our successful turnaround efforts, we will be in an even better position to compete in the market, support our customers and partners, and deliver maximum value to our shareholders," she added.

Whitman will retain the position of president and CEO at Hewlett-Packard Enterprise and Cathie Lesjak will also continue as CFO of the unit.

Dion Weisler, executive vice president at HP Printing and Personal Systems business, will take charge of HP Inc. as president and CEO. Whitman will serve as non-executive Chairman of HP Inc.'s Board of Directors.

According to Reuters, analysts have been calling for a split up of the company, which could help HP concentrate on its growth and strengths.

"The major benefit I see in the move is that the enterprise business will have a singular focus on the data center, and the PC and printer business can be a lot speedier and agile," Patrick Moorhead, president of Moor Insights & Strategy, a tech analyst firm told USA Today.