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Hewlett Packard Enterprise Co ( #HPE ). disclosed an $8.8 billion deal to spin off and merge most of its software operations with Britain’s #MicroFocus International PLC, the latest move by the Silicon Valley giant to narrow its business focus. Under the deal, #HP Enterprise shareholders would get Micro Focus shares currently valued at about $6.3 billion and own slightly more than half the company. Micro Focus also will pay HP Enterprise $2.5 billion in cash. The proposed deal would be the largest purchase by a British firm of a foreign technology company. It comes despite a steep drop in the pound against the U.S. dollar after the U.K. voted in June to exit from the European Union, making the acquisition potentially more expensive for Micro Focus.

Under terms of the agreement, HP Enterprise would divest businesses that include the former operations of Autonomy Corp., a British software maker acquired in 2011 for $11 billion in a deal widely regarded as a mistake.

HP Enterprise, created during last fall’sbreakup of Hewlett-Packard Co., sells hardware, software and services to businesses. Since the split, its chief executive, Meg Whitman, has moved to further narrow the company’s focus through a series of sales and spinoffs.

Ms. Whitman said the Micro Focus deal, announced along with its fiscal third-quarter earnings, should help her company concentrate on core businesses while transferring the divested operations to a team that was more likely to realize their potential.

“This is all about focusing the company on a strategy we know we can win at,” Ms. Whitman said in an interview.

In May, HP Enterprise completed a $2.3 billion deal in China to sell a 51% stake in a venture called H3C that sells networking, server and storage hardware and related services. That same month, HP Enterprise struck a deal to spin off a computer services business that employs about 100,000 people—two-thirds of the company’s workforce count—and merge it with operations of Computer Sciences Corp.

The software businesses employ about 12,000 people. Once the latest transactions are closed next year, HP Enterprise’s staff will have declined to between 50,000 and 60,000 employees from about 210,000, Ms. Whitman said.

Kevin Loosemore, executive chairman of Micro Focus, will head the combined company.

Newbury, England-based Micro Focus specializes in software that works with older computer systems, Mr. Loosemore said in an interview. The assets his company is acquiring fit that strategy well, he said. Two years ago, the company acquired U.S. rival The Attachmate Group Inc. for $1.2 billion.

HP Enterprise on Wednesday reported revenue in the software operations declined 18% from the same quarter a year earlier. The company plans to keep some software products, particularly programs associated with keeping companies’ back-office computing infrastructure running. Those products include software-defined networking, an adjunct to HP Enterprise’s networking hardware business.

After the Micro Focus deal, which mainly involves business applications software, the Palo Alto, Cailf., company is “basically all-in on infrastructure,” said Crawford Del Prete, an analyst at International Data Corp.

HP Enterprise said its third-quarter results included a sevenfold jump in net income because of a $2.2 billion gain from the May sale of a Chinese unit called H3C. But there were signs of weakness in some of its hardware businesses.In all, the company reported profit for the period ended July 31 of $2.27 billion, or $1.32 a share, compared with $320 million, or 19 cents a share, a year earlier. Revenue declined to $12.2 billionfrom $13.06 billion.

The company said third-quarter server revenue was 4% lower than the year-earlier period. Storage revenue also was down 8% and networking revenue down 22%.

On an adjusted basis excluding one-time gains and charges, HP Enterprise said its per share profit was 49 cents, compared with 45 cents in the year-earlier period. Analysts on that basis had predicted earnings per share of 44 cents on revenue of $12.64 billion.

For the current quarter, the company estimated it will report adjusted earnings per share of 58 cents to 63 cents. Analysts on that basis had predicted earnings of 60 cents a share.

HP Enterprise increased its estimate for earnings for the fiscal year ending in October. It projects adjusted earnings per share of between $1.90 and $1.95, up from a prior projection of between $1.68 and $1.78.

The company’s share price declined about 2% in after-hours trading.

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