SAN FRANCISCO, March 21 - Hewlett Packard Co will merge its printer and PC businesses, combining two of its largest divisions as Chief Executive Meg Whitman tries to jumpstart growth at the technology company.

The combined unit, with $65 billion in annual sales, will account for about half the company's revenue and be headed by PC chief Todd Bradley, the company said in a statement on Wednesday.

Reuters had reported on the plans on Tuesday.

Wall Street cautiously welcomed the move as one that will simplify HP's notoriously complex structure. But some analysts said it remains to be seen whether Whitman can revive growth at the $120 billion corporation, which has seen its shares slide over the past two years.

HP's move will facilitate decision-making and improve productivity, but the issues around growth and margin expansion will take more time to resolve, said UBS analyst Um Maynard, who cut his 12-month target price on HP's stock to $26 from $30.

While we believe there may be synergies, we believe they may be modest, Maynard added.

The company is also planning to unify other functions, such as marketing and communications, across the business to promote a stronger brand and improve efficiency.

HP, the largest U.S. technology company by revenue, is trying to keep its core personal computing business profitable as competition from mobile devices erodes sales. The company is trying to transform itself into a major enterprise computing provider.

HP, often mentioned in accounts of the founding of Silicon Valley, has been through its share of turmoil in past years.

Shareholders on Wednesday ratified a slate of 11 directors at an annual meeting in Santa Clara, but repeatedly questioned why HP could not be more like crosstown rival Apple Inc, which is now the most valuable company in the world.

One shareholder even suggested HP open its own stores.

Whitman asked for patience.

We have some real financial challenges, Whitman said. It took us a while to get where we are and it will take us a while to get out.

She also covered the challenges and performance of all the business units, particularly printing and services. She defended the decision to merge the PC and printing as the a way of getting the cost structure working more efficiently.

Turning services around is going to be a longer term journey, she said.

PRIOR ATTEMPTS

HP previously had a combined PC-printing unit under former CEO Carly Fiorina, but the two were split under Mark Hurd, who was ousted from the company in 2010.

HP also considered for months last year a proposal to sell or spin off its PC arm, known as the personal systems group. That followed an announcement that it would get out of the business of making tablets with the failure of its TouchPad.

But after Whitman's predecessor, Leo Apotheker, was also ousted in September, the company abandoned the idea and deemed personal computers to be central to its overall strategy.

While HP still leads the market in PC sales, growth in that division has been dwindling as mobile usage takes off.

HP had a share of about 16 percent of the global PC market at the end of 2011, down sharply from 19.4 percent a year before, according to research firm IDC. By contrast, rivals Lenovo Group Ltd and Dell Inc have both expanded their market share worldwide, with Lenovo now close to HP's lead with a 14 percent share of PC sales.

Bradley will be overseeing by far the largest division within HP, while the current chief of the printing group, three-decade HP veteran Vyomesh Joshi, will step down.

The reorganization sets the stage for a multi-year turnaround. But prior HP CEOs have attempted similar moves with limited success, JPMorgan analyst Mark Moskowitz noted. He called for HP to reassess a potential sale of the two businesses.

There is the possibility that the company could be cleaning up the businesses ahead of a potential spin-off or divesture of the assets, Moskowitz said.

While it is good to see HP rolling up its sleeves, we think investors may have been better served by a sale of the PC/printing businesses now versus down the road.

(Additional reporting by Nicola Leske; editing by Edwin Chan editing by Andre Grenon)

Mark Hurd California HP Carly Fiorina