The HP-EDS deal is obviously confirmed

As discussed yesterday (“HP may be buying EDS“), Hewlett-Packard has indeed entered into a definitive agreement to purchase Electronic Data Systems for $25/share, or $13.9 billion.

To quote from the official release,

HP intends to establish a new business group, to be branded EDS – an HP company, which will be headquartered at EDS’s existing executive offices in Plano, Texas. HP plans that EDS will continue to be led after the deal closes by EDS Chairman, President and Chief Executive Officer Ronald A. Rittenmeyer, who will join HP’s executive council and report to Mark Hurd, HP’s chairman and chief executive officer.

The goal, as discussed yesterday, is to help HP capture a larger share of services revenue than it gets already. Frankly, the company has been leaving a lot of money on the table — money, that in some cases, its partners and resellers have been picking up. More of that revenue will now accrue right to HP.

To quote from the release again,

Acquiring EDS advances HP’s stated objective of strengthening its services business. The specific service offerings delivered by the combined companies are: IT outsourcing, including data center services, workplace services, networking services and managed security; business process outsourcing, including health claims, financial processing, CRM and HR outsourcing; applications, including development, modernization and management; consulting and integration; and technology services. The combination will provide extensive experience in offering solutions to customers in the areas of government, healthcare, manufacturing, financial services, energy, transportation, communications, and consumer industries and retail.

With this deal, much comes down to execution. It’s clear that HP chief executive honcho Mark Hurd (pictured) is better at execution than his predecessor, Carly Fiorina. Let’s see if he can pull this one off. The market is clearly not optimistic: HP fell 5% yesterday on the rumor, and another 5% today.