After intense speculation Hewlett Packard (HP) has confirmed its acquisition of EDS, the leading global technology services company, in a $25 a share deal worth approximately $13.7 billion.

The acquisition will almost double HP’s services revenue, which amounted to $16.6 billion in fiscal 2007. The two companies’ combined services businesses for fiscal 07 boasted annual revenues of more than $38 billion. With a combined 210,000 employees, HP hopes to level the playing field as it chases IBM in the business services space. However, the FT today expressed reservations about HP’s ability to take on IBM.

Commenting on the deal, Mark Hurd, HP Chairman and CEO said, “The combination of HP and EDS will create a leading force in global IT services. Together, we will be a stronger business partner, delivering customers the broadest, most competitive portfolio of products and services in the industry. This reinforces our commitment to help customers manage and transform their technology to achieve better results.”

EDS will continue to be led by EDS Chairman, President and CEO Ronald A. Rittenmeyer, who will join HP’s executive council and report to Mark Hurd. HP aims to complete the acquisition towards the end of 2008 when it plans to establish a new business group called ‘EDS – an HP company’.