HP is to acquire smartphone provider Palm for $1.2 billion to allow it to move further into the mobile market.

The deal has been confirmed at a price of $5.70 per share of Palm common stock in cash, and has been approved by the HP and Palm boards of directors. The addition of Palm's webOS platform will enhance HP's ability to participate more aggressively in the fast-growing, highly profitable smartphone and connected mobile device markets. Palm's unique webOS will allow HP to take advantage of features such as true multitasking and always up-to-date information sharing across applications.

Todd Bradley, executive vice president of the personal systems group at HP, said: “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.

“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.”

Palm's current chairman and CEO, Jon Rubinstein, is expected to remain with the company. He said: “We're thrilled by HP's vote of confidence in Palm's technological leadership, which delivered Palm webOS and iconic products such as the Palm Pre.

"HP's longstanding culture of innovation, scale and global operating resources make it the perfect partner to rapidly accelerate the growth of webOS. We look forward to working with HP to continue to deliver industry-leading mobile experiences to our customers and business partners.”

The transaction is expected to close during HP's third fiscal quarter ending 31 July 2010.

Meanwhile rumours have circulated around the Infosecurity Europe exhibition that HP is close to a deal that will see it acquire McAfee. The anti-virus vendor declined to comment on speculation, with a spokesperson claiming that the vendor 'had nothing of value to say on the matter'.