Hewlett Packard Enterprise said it would merge its IT services business with Computer Sciences Corp, allowing the company to focus on its cloud services business and other units. Under Chief Executive Meg Whitman, Hewlett Packard Enterprise has been restructuring its IT consulting and services group.

The company sold at least 84 percent of its 60.5 percent stake in Indian IT services provider Mphasis Ltd to Blackstone Group for $1.1 billion in April.

HPE is expected to have $33 billion in annual revenue after the spinoff and will concentrate on its remaining enterprise group that includes its cloud services business and makes servers, routers and switches.

HPE, which houses the former Hewlett-Packard Co's corporate hardware and services division, said the merger of the two businesses is expected to produce cost synergies of about $1 billion in the first year after close, expected by March 2017.

Computer Sciences Chief Executive Mike Lawrie will become chairman, president and CEO of the new company, 50 percent of which will be owned by HPE shareholders. Whitman will join the board of the new company.