Hitachi to pay IBM €2.2bn for hard disk drive business
Hitachi says it will IBM €2.2bn for the bulk of IBM's hard drive assets.
The companies will combine the businesses in a joint venture.
Hitachi will initially own 70% of the company and will make a series of fixed payments to IBM before assuming full ownership after three years.
The two companies announced the deal in April but only released additional details on Tuesday.
Hitachi's current managing director Jun Naruse will be the new venture's chief executive.
The companies said in April that the joint venture will be based at IBM's disk development and engineering offices in San Jose, California.
Both companies will contribute executives and employees.
The new company combines plants and intellectual property along with some 24,000 employees - about 18,000 from IBM and 6,000 from Hitachi - with joint manufacturing operations at 11 plants worldwide.
With both companies purchasing much of their hard drive supplies from the joint venture, Hitachi estimates the new company will deliver $5bn (€5.3bn) in sales in fiscal year 2003, with a sales target of $7bn (€7.4bn) by fiscal year 2006.
"The purchase of IBM's HDD business brings us the valuable business assets required for long-term success in this highly competitive market," Masaaki Hayashi, senior vice president and director of Hitachi, said in a statement.
