BREAKING NEWS: HP purchase Palm for $1.2 Billion

Well it looks like the question as to the fate of Palm has been answered if the news just posted by The New York Times is any indication.

It is being reported by DealBook that Hewlitt-Packard has entered into an agreement to buy the beleaguered cell phone company for $1.2 Billion – in cash.

“We’re thrilled by HP’s vote of confidence in Palm’s technological leadership, which delivered Palm webOS and iconic products such as the Palm Pre,” Jon Rubenstein, Palm’s chairman and chief executive, said in a statement. “HP’s longstanding culture of innovation, scale and global operating resources make it the perfect partner to rapidly accelerate the growth of webOS.”

Hewlitt-Packard has issued a press release on the deal which says in part

“Palm’s innovative operating system provides an ideal platform to expand HP’s mobility strategy and create a unique HP experience spanning multiple mobile connected devices,” said Todd Bradley, executive vice president, Personal Systems Group, HP. “And, Palm possesses significant IP assets and has a highly skilled team. The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market.”

Under the terms of the agreement Palm shareholders will get $5.70 in cash for each share of Palm common stock that they hold at the closing of the merger. It is also stated that current Palm CEO Jon Rubinstein will remain with the company once the merger is completed.