HP said that the combination of its scale and financial clout along with Palm's webOS platform will enhance its ability to “participate more aggressively” in the smartphone and connected mobile markets.

"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," said Todd Bradley, Executive Vice President, Personal Systems Group, HP. "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."

Palm's current chairman and CEO, Jon Rubinstein, is expected to remain with the company.

"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," said Rubinstein. "We look forward to working with HP to continue to deliver industry-leading mobile experiences to our customers and business partners."

Under the terms of the merger, Palm stockholders will receive $5.70 in cash for each share of Palm common stock that they hold at the closing of the merger.

When contacted, a local HP rep said that the company wouldn't be making any further local comment.

Yesterday, HP unveiled new integrity solutions it said represented the first major architectural upgrade for Integrity Superdome in a decade.

Update: The deal has now been completed. Full story here.