H-P in Talks To Buy EDS, In Challenge To Rival IBM

By Matthew Karnitschnig, Jim Carlton and Justin Scheck

Word Count: 1,574 | Companies Featured in This Article: Hewlett-Packard, Electronic Data Systems, International Business Machines, ING Groep, Computer Sciences, NCR, General Motors, PepsiCo

Hewlett-Packard Co. was close Monday to acquiring Electronic Data Systems Corp. for about $13 billion, according to people familiar with the matter, setting the stage for a challenge to IBM's dominance in computer consulting and services.

An announcement of the all-cash transaction that would unite two of the most storied names in computing was expected on Tuesday, these people said, though it could falter in last-minute negotiations. The price represents a more than 30% premium on where EDS's shares were trading before The Wall Street Journal reported the talks on its Web site Monday afternoon. The purchase price doesn't include ...