Hewlett-Packard Buying EDS for $13.9B

Updated from 7:48 a.m. EDT

SAN FRANCISCO -- Hewlett-Packard(HPQ Quote) and Electronic Data Systems(EDS Quote) announced a $13.9 billion merger deal Tuesday that could reshape the market for technology outsourcing services.

The acquisition of EDS by H-P, which was valued at $25 per share would make H-P the No.2 player in the market, after IBM(IBM Quote).

"It creates the only other services business in the marketplace that's got nearly the scale that IBM does," says Bob Welch, VP of global services research at industry research firm IDC. ...