FTSE 100 Tech Firm Micro Focus To Pay $8.8bn For HP Software

Shares (Berlin: DI6.BE - news) in FTSE 100 tech firm Micro Focus have soared by more than a fifth after it confirmed an $8.8bn (£6.6bn) deal to buy Hewlett Packard (NYSE: HPQ - news) 's software arm.

The agreement, first reported by Sky News on Wednesday , represents a further shift for the UK's technology industry in the wake of Softbank's £24.3bn takeover of ARM Holdings (LSE: ARM.L - news) .

Under the deal, HP (Xetra: 7HP.DE - news) will spin off and merge its non-core software assets with Micro Focus.

They include former parts of Autonomy, the British software group, which was taken over by HP in disastrous fashion in 2011.

It later led to the break-up of HP and resulted in a wave of litigation between the two sides which remains unresolved.

Micro Focus said the deal with HP was "wholly consistent with the long-term business strategy we have been pursuing to be the most disciplined global provider of infrastructure software".

The merged business would account for annual revenues of $4.5bn currently, Micro Focus said.

Its executive chairman, Kevin Loosemore, added: "The combination of Micro Focus with HPE Software will give customers more choice as they seek to maximize the value of existing IT assets, leveraging their business logic and data along with next-generation technologies to innovate in new ways with the lowest possible risk."

He said he first approached HP about a deal in February and was not put off by the market chaos which followed the UK's vote to leave the EU.

In addition to the software assets deal, the pair are also planning a commercial partnership to bolster development in areas such as cloud computing, Micro Focus said.