HP, 3PAR Sign Merger Agreement

HP and Dell have been bidding against each other since mid-August over 3PAR, starting with Dell's initial bid of $1.15 billion.

Dell earlier on Thursday said it would not make a higher offer for 3PAR after HP's bid reached the $2.35 billion mark. As a result, 3PAR has ended its merger agreement with Dell and paid Dell the $72 million termination fee per that agreement

The acquisition of 3PAR would have been important to both Dell and HP as both look for ways to beef up their enterprise storage offerings and look towards cloud computing.

3PAR is a Fremont, Calif.-based developer of enterprise-class storage arrays featuring such services as clustering, tiered storage, and thin provisioning, which allows applications to be configured with more storage capacity than is physically available.

The acquisition of 3PAR offered both HP and Dell the opportunity to replace their existing enterprise-class storage product lines, both of which depended on OEM or reseller relationships with third-party manufacturers, with their own technology.

Dave Donatelli, HP's executive vice president and general manager for enterprise servers, storage, and networking, said in a statement that his company intends to invest in 3PAR’s technology.

"HP and 3PAR is a winning combination that will accelerate HP’s Converged Infrastructure strategy and bolster our ability to provide customers with the industry’s highest levels of performance, efficiency and reliability," Donatelli said.

David Scott, 3PAR president and CEO, said in that statement, "As part of HP, 3PAR's agile, efficient storage solutions will truly thrive, particularly given HP's ability to accelerate investment in our products and reach new customers around the world."

HP expects the acquisition to close by the end of 2010.

Neither HP or 3PAR wer available for further comment.