IBM's and Hitachi's agreement to transfer each of their Hard Disk Drive (HDD) assets to a newly formed company is one step closer to reality. The agreement, announced last June, was granted approval by the Federal Trade Commission (FTC). The companies have already received antitrust approval from Brazil's Conselho Administrativo de Defesa Economica, the European Commission, the Japan Fair Trade Commission, and Taiwan's Fair Trade Commission. Before the deal is complete, IBM and Hitachi must receive regulatory approval from Mexican authorities.
IBM's HDD business has struggled in recent years. The agreement between the two companies will include the transfer of the majority of IBM's HDD-related assets, including its HDD-related intellectual property portfolio, for $2.05 billion to Hitachi. Hitachi will use the acquired assets and its own HDD assets to spin off a new separate company. Initially, Hitachi will own 70 percent of the new company and will make a series of fixed payments to IBM before assuming full ownership in 3 years. The new company will be called Hitachi Global Storage Technologies.