KUHN CAPITAL Sunday, February 25, 2018
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IBM, Hitachi to Combine Data Storage Efforts

IBM has announced a joint venture in which it would transfer its money-losing hard drive unit to a new entity, majority owned by Hitachi, as part of an alliance between the companies to develop advanced data storage systems for large corporations.

The two companies plan a multi-year alliance to research and develop new open standards technologies for next-generation storage networks, systems and solutions.

IBM and Hitachi intend to combine various hard disk drive (HDD) operations into a new standalone business, integrating their R&D, manufacturing and sales/marketing operations.

Hitachi is expected to hold 70% of the JV, and pay IBM for its HDD assets.

With the deal, IBM will be able to remove the hard drive business from its books, potentially improving its balance sheet. The alliance also allows Hitachi and IBM to more effectively compete with EMC, the industry's leader.

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