Hewlett Packard Enterprise Co. announced Wednesday afternoon that it is spinning off software assets and merging them with U.K. software company Micro Focus in a deal that values the assets at $8.8 billion. HPE said that the divestiture would allow it to focus solely on data-center operations with a focus on hybrid cloud and on-premises storage and computing. "We believe that the software assets that will be a part of this combination will bring better value to both our customers and shareholders as part of a more focused software company committed to growing these businesses on a stand-alone basis," Chief Executive Meg Whitman said. HPE shareholders will own 50.1% of the new combined company, which will continue to be called Micro Focus and be led by that company's CEO, Kevin Loosemore. The former Hewlett-Packard, which split into HP Inc. and HPE last year, built its enterprise software offerings through acquisitions such as the purchase of U.K. software company Autonomy, which cost more than $10 billion and led to accusations of fraud. HPE expects to incur one-time after-tax costs of $700 million in the separation if it is approved by Micro Focus shareholders and regulators. HPE, which also announced earnings Wednesday, fell 1% in late trading.
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