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HP has agreed to buy beleaguered handheld maker Palm for $1.2bn.

The two companies announced the deal with a press release Wednesday afternoon, and they plan to hold a joint conference call with analysts and stockholders later in the day.

HP has agreed to purchase the company behind the Pre smartphone and its webOS at a price of $5.70 per share of Palm common stock, and the deal has been approved by boards of both companies. “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,” reads a canned statement from Todd Bradley, executive vice president in HP's personal systems group.

“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 agreement, Palm stockholders will receive $5.70 in cash for each share they hold at the close of the merger. It's expected that the merger will close during HP's third quarter, which ends on July 31.

It's also expected that Palm CEO Jon Rubinstein will join HP. As recently as last week, Rubinstein vowed that his company could make it on its own. He told the Financial Times that he "believe[s] Palm can survive as an independent company" and that the company has "a plan that gets us to profitability." ®

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