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Last Updated: Tuesday, 25 July 2006, 22:47 GMT 23:47 UK
HP buys Mercury for $4.5bn price
Hewlett-Packard computer
HP is looking to expand the software and services it offers
Hewlett-Packard, the computer and printer company, has bought Mercury Interactive for about $4.5bn (2.4bn).

The acquisition will double annual revenues at Hewlett-Packard's software business to $2bn.

The company's new boss Mark Hurd has made a number of purchases since he took over from Carly Fiorina last year.

Analysts said the deal - which values Mercury shares at $52 each, 33% more than their closing price on Tuesday - should be positive in the long term.

Many producers of computer hardware have looked to expand their software and services business in order to protect themselves from a downturn in demand, analysts said.

Mercury's software lets companies measure and monitor the effectiveness and performance their computer software, hardware and networks.

HP's move comes as Mercury is being probed by regulators over its share option scheme for executives.

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