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HPE introduced it was shopping for Cray for $1.three billion, giving it entry to the corporate’s excessive efficiency computing portfolio, and maybe a foothold into quantum computing sooner or later.

The acquisition worth was $35 a share, a $5.19 premium over yesterday’s shut of $29.81 a share. Cray was based within the 1970s and for a time represented the slicing fringe of tremendous computing in the USA, however instances have modified, and because the market has shifted, a deal like this is sensible.

Ray Wang, founder and principal analyst at Constellation Analysis says that is about consolidation on the excessive finish of the market. “It is a sensible acquisition for HPE. Cray has been shedding cash for a while however had an awesome portfolio of IP and patents that’s key for the quantum period,” he instructed TechCrunch.

Whereas HPE’s president and CEO Antonio Neri didn’t see it in these phrases, he did see a chance in combining the 2 organizations. “By combining our world-class groups and expertise, we may have the chance to drive the subsequent era of excessive efficiency computing and play an essential half in advancing the way in which individuals dwell and work,” he mentioned in a press release.

Cray CEO and president Peter Ungaro agreed. “We imagine that the mix of Cray and HPE creates an business chief within the fast-growing Excessive-Efficiency Computing and AI markets and creates various alternatives that neither firm would doubtless have the ability to seize on their very own,” he wrote in a weblog submit asserting the deal.

Whereas it’s not clear how this can work over time, this kind of consolidation often includes some job loss on the operations aspect of the home as the 2 corporations turn into one. It’s also unclear how this can have an effect on Cray’s clients because it strikes to turn into a part of HPE however HPE has plans to create a excessive efficiency computing product household utilizing its new belongings.

HPE was fashioned when HP cut up into two corporations in 2014. HP Inc. was the printer division, whereas HPE was the enterprise aspect.

The deal is topic to the everyday regulatory oversight, but when all goes effectively, it’s anticipated to shut in HPE’s fiscal Q1 2020.

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