Today, Palm and Handspring announced that their boards of directors have unanimously approved a definitive agreement for Palm to acquire Handspring. According to a news release, the Palm board also gave final approval for the spin-off of PalmSource Inc., a subsidiary responsible for developing and licensing the Palm operating system, and the Palm Solutions Group, a business unit responsible for designing,… manufacturing, and marketing handheld devices. Immediately following the completion of the spin-off, Handspring will be merged with Palm, and the merged company will be renamed later in the year, the companies said. The transaction is expected to close later this year, “subject to certain conditions.”

“This is a great day for the Palm Economy,” said David Nagel, PalmSource president and chief executive officer. “The establishment of PalmSource as an independent company and the strengthening of our largest licensee mark an historic day in the handheld industry. As the leading mobile platform provider, we look forward to the opportunity to attract new customers and to grow the market for mobile computing and communication products.”

The deal is based on a stock swap: following the spinoff of PalmSource, Handspring shareholders will receive 0.09 of a Palm share for each share of Handspring common stock.

 
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