Hewlett Packard Enterprise is divesting more assets, as the company narrows its focus to data centre and cloud equipment. The company will spin off its enterprise software business and merge the activities with the UK's Micro Focus. HPE will own 51 percent of the new company, with its stake valued at USD 6.3 billion, and receive USD 2.5 billion cash under the deal.
The company will acquire HPE's Application Delivery Management, Big Data, Enterprise Security, Information Management & Governance and IT Operations Management businesses. Micro Focus expects to improve the margin on HPE's software assets by approximately 20 percentage points by the end of the third full financial year following the closing of the transaction, while also investing in key growth areas like big data and security. The combined company will continue under the name Micro Focus and be led by Kevin Loosemore, Executive Chairman of Micro Focus, and Mike Phillips as CFO.
HPE will have a seat on the Micro Focus board and nominate half the independent directors. Pending regulatory clearance and approval by Micro Focus shareholders, the companies expect to close the deal in the second half of HPE's fiscal year. The separation of the assets will result in one-time costs of USD 700 million for HPE this fiscal year.
In addition, HPE and Micro Focus announced plans for a commercial partnership that will name SUSE as HPE's preferred Linux partner and will bring together HPE's Helion OpenStack and Stackato solutions with SUSE's OpenStack expertise to provide hybrid cloud offerings for HPE customers.
