Thursday 8 September 2016 6:47 am

Micro Focus and HP Enterprise agree tie-up to create UK tech giant

Hewlett Packard Enterprise and UK-based Micro Focus are set to create one of the country's largest tech firms in a deal valued at around $8.8bn (£6.6bn).

Shares in Micro Focus rose by 21.28 per cent in early trading today.

Hewlett Packard Enterprise will merge most of its software assets with Micro Focus, which will pay the US firm $2.5bn as part of the tie-up; Hewlett Packard Enterprise's shareholders will then take a 50.1 per cent share of the new company – a stake estimated to be worth $6.3bn.

The new entity will be led by Micro Focus' executive chairman Kevin Loosemore.

The deal includes parts of Autonomy, a company that became a headache for HPE when it took it on in 2011. 

"The combination of Micro Focus with HPE Software will give customers more choice as they seek to maximise 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," said Loosemore.

Meg Whitman, president and chief executive officer of HPE, added: "With today's announcement, we are taking another important step in achieving the vision of creating a faster-growing, higher-margin, stronger cash flow company well positioned for our customers and for the future."