IBM- Hitachi deal gets FTC approval

NEW YORK: The U.S. Federal Trade Commission has approved IBM Corp's $2.05 billion sale of most of its hard-disk drive assets to Japan's Hitachi Ltd., the companies said. The deal still needs approval from one other jurisdiction. However, IBM was not immediately available for comment on the deal.

The companies plan to combine their hard drive assets into a joint venture in which Hitachi will initially have a 70 percent stake. Hitachi plans to take full ownership of the venture after three years.

Hitachi has vowed to turn the money losing business around, making it profitable in the business year beginning in April 2003, when it sees revenues at $5 billion. Analysts have said an extensive restructuring will be needed.

Hard disk drives, similar to other components for computers, have been hurt by slack demand and sharply reduced pricing in the past year. IBM has sold other non-performing divisions of its technology business this year as part of an effort to bring its microelectronics business back to profitability.

Hitachi and IBM previously received antitrust approval for the transaction from the European Commission, the Japan Fair Trade Commission, Brazil's Conselho Administrativo de Defesa Economica and Taiwan's Fair Trade Commission, the companies said. IBM stock rose nearly 3 percent to $89.44, up $2.34, Monday on the New York Stock Exchange.

© Reuters