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HP buys Palm for $1.2 billion

Hewlett-Packard has acquired palm for $1.2 billion, the companies announced this afternoon.

The deal has been approved by both companies’ boards of directors and is expected to close by the end of July.

“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,” with CEO Jon Rubinstein saying in a statement that “HP’s longstanding culture of innovation, scale and global operating resources make it the perfect partner to rapidly accelerate the growth of webOS.”

The survival of webOS and its parent company had come under question in recent weeks, with some analysts suggesting that shares of Palm were essentially worthless. Things only got worse when RadioShack decided to stop selling Palm’s two flagship devices: Pre and Pixi.

HP currently offers one basic messaging phone, but it’s packaged mostly with laptops and workstations that HP sells to large corporate clients. Most of HP’s rivals in the PC world have developed smart phones intended to compete with Nokia and Apple. Snapping up Palm gives HP an instant presence in the market.