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Hewlett-Packard to buy Aruba Networks in $3 bln deal

Last updated: 09:23 02 Mar 2015 EST, First published: 10:23 02 Mar 2015 EST

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Hewlett-Packard (NYSE:HPQ) has announced a definitive agreement to acquire Aruba Networks (NASDAQ:ARUN), a leading provider of network access solution for mobile enterprise, for about $2.7 billion in cash.

The deal values Aruba at $24.67 share, a 1 percent discount to Aruba Network's close on February 27, when the stock reached the highest level in nearly two years following a report about a possible deal. With debt and cash, the deal has a value of $3 billion.

Aruba shares fell 1.5 percent to $24.44 at 10:18 a.m. in New York. HP was up 0.1 percent at $34.92.

Together the companies will deliver converged campus solutions and the new organization will be led by Aruba's chief executive officer Dominic Orr.

Aruba makes hardware and software used to build Wi-Fi networks for customers including China’s Dalian Wanda Group Co., which uses the technology in shopping malls. Other customers include California State University at Los Angeles and the Edzan Hotels & Suites in Qatar.

“Enterprises are facing a mobile-first world and are looking for solutions that help them transition legacy investments to the new style of IT," HP chief executive officer Meg Whitman said in a statement today.

"By combining Aruba's world-class wireless mobility solutions with HP's leading switching portfolio, HP will offer the simplest, most secure networking solutions to help enterprises easily deploy next-generation mobile networks."

The deal is expected to close in the second half of HP's fiscal year 2015, subject to Aruba stockholder and U.S. regulatory approvals.

Hewlett-Packard in October unveiled plans to separate its personal-computer and printer businesses from its corporate hardware and services operations, which has been billed as the growth engine.

HP's deal for Aruba Networks is the largest since its failed 2011 acquisition of software company Autonomy for $11 billion. The deal ended with an $8.8 billion write-down for HP and an inquiry by the Justice Department after HP accused Autonomy of accounting fraud.

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