HP has just announced that it is buying Palm for US$5.70 per share, or about $1.2 billion.

HP says Palm’s webOS operating system will allow HP to participate more aggressively in the smartphone market. “The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market,” HP’s executive vice president, Personal Systems Group, Todd Bradley, said.

Palm stockholders will receive $5.70 per share of Palm common stock owned at the closing of the merger. The merger is expected to close during HP’s third fiscal quarter, which ends on July 31, 2010. HP says that Jon Rubinstein, Palm’s chief executive officer, will remain with the company.