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 jump-start growth at the technology company.

The new unit, which with $65.35 billion in annual sales will account for about half percent of the company's revenue, will 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 that 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.

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.

The result will be a faster, more streamlined, performance-driven HP that is customer-focused and poised to capitalize on rapidly shifting industry trends, Whitman said in a statement.

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.

Investors will get a chance to question Whitman on the move when they meet with her later on Wednesday at the annual shareholders meeting.

PRIOR ATTEMPTS

HP previously had a combined PC-printing unit under former CEO Carly Fiorina, but the two were split under the regime of 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 the company's announcement that it would get out of the business of making tablets with the failure of its TouchPad.

But after Whitman's predecessor as CEO, Leo Apotheker, was ousted in September, the company abandoned the idea and deemed personal computers core 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 the largest division within HP while the current chief of the printing group three-decade HP veteran Vyomesh Joshi, will be stepping down.

The reorganization sets the stage for a multi-year, turnaround but the outcome is unknown at this point; 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.

(Reporting by Nicola Leske and Poornima Gupta; Editing by Gerald E. McCormick and Mark Porter)

Carly Fiorina Mark Hurd HP Meg Whitman