Hitachi buys IBM’s hard-disk drives div for $2.05 b

NEW YORK: IBM Corp. said it has closed a deal to sell its hard-disk drive assets to Hitachi Ltd. for $2.05 billion, part of an effort to cut non-performing assets. Under terms of the deal, announced in June, Hitachi initially will own 70 percent of a newly created hard disk drive company, buying the remaining 30 percent from IBM over the next three years.

The companies in April had announced plans to collaborate on data storage, and then in June said that they would create a separate hard-disk drive company that Hitachi would eventually own. Hard disk drives store data in computers.

IBM's hard drive business has been losing money for years. The sale of the assets was one of the first major initiatives by Chief Executive Officer Samuel Palmisano, who took over managing the company from Louis Gerstner early last year and becomes chairman on Jan. 1.

IBM has also trimmed other non-performing assets, particularly in technology hardware. For instance, the company shifted manufacturing of desktop computers to contract manufacturer Sanmina-SCI Corp. in January.

© Reuters