Hewlett Packard Enterprise, the technology solutions company that split off from HP only last year, plans for a tax-free spin-off and merger of its enterprise services business with CSC. The spin-off and merger is the logical next step in the turnaround of HPE’s Enterprise Services segment, said the company in a statement. The transaction currently targeted to be completed by March 31, 2017, is subject to certain customary closing conditions. Goldman Sach is serving as financial advisor to HPE on the transaction.

“The ‘spin-merger’ of HPE’s Enterprise Services unit with CSC is the right next step for HPE and our customers,” said Meg Whitman, president and chief executive officer of Hewlett Packard Enterprise. “Enterprise Services’ customers will benefit from a stronger, more versatile services business, better able to innovate and adapt to an ever-changing technology landscape.”

Mike Lawrie, the current head of CSC, will become chairman, president and CEO of the new entity which is yet to get a name, while Meg Whitman will be joining the board. The new company’s board will be split 50/50 between directors nominated by HPE and CSC. In other executive moves, CSC’s current CFO, Paul Saleh, will continue in that role in the new company after the transaction closes, and Mike Nefkens, the current EVP and GM of HPE’s Enterprise Services business, will now be part of the new company’s executive team.

On a pro forma basis, the new company that combines CSC and HPE’s Enterprise Services business is expected to have annual revenues of approximately $26 billion, more than 5,000 customers in 70 countries and employees in every major global region.

Shares in both the companies soared higher on the news, with HP enterprise jumping more than 10 per cent in extended trading, and CSC shares going up by roughly 20 per cent.