The Hindu Business Line : S&P places EDS ratings on credit watch

NEW DELHI: Global credit rating agency Standard & Poor's (S&P) Ratings Services on Wednesday said it has placed Electronic Data System's (EDS) ratings on credit watch with positive implications.

The credit watch placement follows the announcement that Electronic Data System (EDS) has agreed to be acquired by Hewlett-Packard Co for over $13 billion, plus the assumption of about $3 billion of EDS debt.

Standard & Poor's Ratings Services in a statement today said, "We have placed its ratings, including the 'BBB-' corporate credit rating, on EDS on credit watch with positive implications."

Texas-based EDS is the second-largest global provider of information technology services while California-based Hewlett-Packard is a leading, global provider of technology products, solutions, and services to consumers and businesses.

The transaction is expected to close by December 31, subject to regulatory approval. "If EDS's rated debt remains outstanding, we likely will equalise the ratings with those on HP," said Mr Molly Toll-Reed, Credit Analyst, Standard & Poor's.

The transaction is expected to close in the second half of 2008, HP said in a statement today.

According to the statement, HP intends to establish a new business group, to be branded EDS - an HP company, which would be headquartered at EDS's existing executive offices in Plano, Texas.

Post deal, HP plans that EDS would continue to be led by its EDS Chairman, President and Chief Executive Officer, Mr Ronald A Rittenmeyer. - PTI

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