UPDATE - HP to buy Mercury Interactive for $4.5B


HP is paying a stock premium of about 33 percent to purchase Mercury shares -- an amount Hurd called "not unusual."

"I think this premium accurately reflects the value of this property," he said. "We see a lot of opportunity for HP."

The deal has been under consideration for some time, he said. "From a strategic standpoint, the fact that [Mercury is a] software business that was almost a perfect complement for our software business" made the deal a good one, according to Hurd.

"We think it makes sense," he said. "We are very focused on making this right and making this work. I am confident that this transaction demonstrates that HP is building a software company that is to be reckoned with."

Thomas Hogan, senior vice president of HP's software business, said the product lines from the two companies "complement each other almost completely, with no product overlap."