Hitachi, Ltd. and IBM announced that they have reached a definitive agreement
to transfer their hard disk drive (HDD) operations to a new standalone company
under majority Hitachi ownership. These plans were originally announced
in April as part of a larger storage relationship between the two companies.
Hitachi has agreed to purchase the majority of IBM's HDD-related assets
for $2.05 billion, which includes the transfer of IBM's HDD-related intellectual
property portfolio to the new organization. Hitachi will initially own
70 percent of this new company and will make a series of fixed payments
to IBM before assuming full ownership after three years.
The new company will be based in San Jose, California, and managed by
an independent team comprising executives from Hitachi and IBM's existing
HDD operations. The new organization will bring together approximately
24,000 employees, about 18,000 from IBM and 6,000 from Hitachi, with major
manufacturing operations at 11 locations around the world.