HP has agreed to acquire struggling smartphone vendor Palm for $1.5bn (£985m), or $5.70 (£3.74) per share.
HP said that it plans to keep Palm's management structure in control of the operation, specifically chief executive Jon Rubenstein, following the expected finalisation of the deal in July.
"We are thrilled by HP's vote of confidence in Palm's technological leadership, which delivered Palm webOS and iconic products such as the Palm Pre, " said Rubenstein.
"HP's longstanding culture of innovation, scale and global operating resources make it the perfect partner to rapidly accelerate the growth of webOS. "
The deal ends what has been a tumultuous period for Palm as the company attempted to re-establish itself as a dominant force in the handset market.
The company introduced the Pre in 2009, which was powered by its next-generation webOS operating system.
The Pre and its successors failed to make a major splash in the market, however, and by late 2009 the company's losses began to mount up.
Problems continued with poor results in early 2010, and in recent weeks it became clear that the company was in need of a merger deal.
HP hopes to expand its own smartphone operations with the purchase of Palm, citing webOS as the platform for its future mobile devices.
"Palm possesses significant intellectual property assets and has a highly skilled team," said HP personal systems group executive vice president Todd Bradley.
"Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market."
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