HP has announced that they will be acquiring Palm for $1.2 billion.

From the press release:

HP and Palm, Inc. today announced that they have entered into a definitive agreement under which HP will purchase Palm, a provider of smartphones powered by the Palm webOS mobile operating system, at a price of $5.70 per share of Palm common stock in cash or an enterprise value of approximately $1.2 billion. The transaction has been approved by the HP and Palm boards of directors.

The press release also mentions that current chairman and CEO, Jon Rubinstein, is expected to remain with the company.

I see this as a good move for both companies. But, I am still a little worried, this could easily be poorly executed. What keeps me hopeful though, is this little bit from MG Siegler’s interview with HP’s senior VP Brian Humphries in which Humphries says:

WebOS is the best-in-class mobile operating system. Our intent is to double down on WebOS.

The biggest mistake HP could make is to not use webOS for all of their handheld and tablet devices. There has already been word from Michael Arrington on TechCrunch that HP has canceled their Windows 7 tablet. Arrington mentions ChromeOS as a possible replacement OS on similar future tablets from HP, I truly hope this isn’t the case, webOS would be fantastic on a tablet. HP needs to use every resource at Palm to its fullest extent, not doing so would defeat the purpose of this acquisition.